Zhi Tong Cai Jing·2025-12-03 07:39Group 1 - Morgan Stanley reaffirms a positive outlook on HSBC Holdings (00005) due to strong wealth growth and potential synergies with Hang Seng Bank (00011) observed during a recent financial tour in Hong Kong [1] - The operating environment in Hong Kong and the UK is improving, including a recovery in the Hong Kong residential market and consolidation in the UK market; slight improvement in Hong Kong commercial real estate conditions [1] - HSBC's target price for December 2026 is raised from HKD 132 to HKD 138, maintaining an "Overweight" rating [1] Group 2 - Concerns exist regarding risks in Chinese commercial real estate, but HSBC's exposure is only 0.7% of total loans, with a loan loss reserve (LLR) of 15%, indicating manageable profit risks [1] - Morgan Stanley believes that risks in Hong Kong commercial real estate may have peaked, with expected credit loss rates (ECL) in 2026 likely lower than in 2025; however, risks in Chinese commercial real estate are rising [1] - HSBC's earnings per share forecast for fiscal years 2026 to 2027 is raised by 3% to 4%, with an average tangible equity return forecast of 16.6% for fiscal year 2025, declining to 15.8% in 2026, and slightly recovering to 15.9% and 15.8% in 2027 and 2028 respectively [2]