Zhi Tong Cai Jing·2025-10-14 08:31Core Viewpoint - JPMorgan's report indicates that HSBC Holdings' privatization of Hang Seng Bank will have a positive impact on profitability, maintaining an "overweight" rating with a target price of HKD 122 [1] Financial Impact - The privatization is expected to increase HSBC's net profit after tax (NPAT) by 3.7% by 2027, with earnings per share rising by 0.1% [1] - The average return on tangible equity (ROTE) is projected to improve by 38 basis points [1] - The privatization will release approximately 40 basis points in HSBC's Common Equity Tier 1 (CET1) capital ratio [1] Strategic Outlook - The report suggests that the privatization will help HSBC optimize capital utilization and enhance the long-term profitability of its Hong Kong operations [1] - Despite short-term challenges, including a lack of positive catalysts and no share buyback support, HSBC's long-term yield is still expected to reach 5% [1] - The report notes that the recent currency depreciation has already factored in the downside risks associated with the transaction [1]