Ge Long Hui·2025-10-29 19:44Core Viewpoint - 中银香港's operating income for the first three quarters of 2025 increased by 6.3% year-on-year, with a slowdown in growth compared to the first half of 2025, primarily due to fluctuations in non-interest income and increased provisioning [1] Financial Performance - For Q1-Q3 2025, operating profit rose by 3.5% year-on-year, a decrease in growth rate from the first half of 2025 by 9.5 percentage points [1] - As of September, total assets, total loans, and total deposits increased by 7.4%, 3.5%, and 10.4% year-on-year, respectively, with growth rates changing by -2.7 percentage points, +3.0 percentage points, and +1.4 percentage points compared to June [1] - The adjusted net interest margin for Q3 2025 was 1.54%, up 1 basis point from Q2 2025, driven by rising HKD interest rates and improved deposit costs [1] Income Sources - Net service fees and commission income for the first three quarters increased by 22.1% year-on-year, maintaining a high growth rate above 20% despite a decrease of 3.7 percentage points from the first half of 2025 [1] - Other non-interest income rose by 72.5% year-on-year, although the growth rate decreased by 26.6 percentage points from the first half of 2025, mainly due to fluctuations in foreign exchange swaps and a decline in global market trading income [1] Asset Quality - As of September, the non-performing loan ratio was 0.96%, down 6 basis points from June, while the annualized credit cost was 0.4%, up 0.14 percentage points year-on-year [2] - Operating expenses for the first three quarters increased by 1.9% year-on-year, with a cost-to-income ratio of 22.05%, down 0.95 percentage points year-on-year, indicating strong performance [2] Strategic Initiatives - The company is focusing on the Greater Bay Area and Southeast Asia markets, leveraging digital transformation and risk control to enhance multi-business collaboration [2] - The personal banking sector has seen increased trading volumes due to the recovery of the Hong Kong stock market, while corporate banking has expanded its client base and maintained market leadership in new stock collections and syndicate loans [2] Valuation and Target Price - The target price for 2025 is set at HKD 45.59, with a target price-to-book ratio (PB) of 1.35, reflecting a premium due to loan growth and strengthened Southeast Asia operations [3]