中金：维持东亚银行“中性”评级 上调目标价至18.03港元

Core Viewpoint - The new strategic direction of Bank of East Asia (00023) is clear, with a reduction in credit costs and an increase in non-interest income assumptions, leading to an upward revision of net profit forecasts for 2026E/2027E by 42.5%/49.0% to HKD 5 billion/HKD 5.7 billion [1] Group 1: Financial Performance - The company's 2025 performance was below expectations, with revenue of HKD 21 billion, a year-on-year increase of 0.2%, and net profit of HKD 3.2 billion, a year-on-year decrease of 20.1% [2] - The company's credit cost for 2025 was 1.04%, with a slight year-on-year increase of 1 basis point, and a second half increase of 19 basis points to 1.14% [4] - The net interest income for 2025 decreased by 7.3% due to a decline in HIBOR and LPR, resulting in a narrowing of the interest margin by 19 basis points to 1.90% [5] Group 2: Strategic Goals - The company aims to improve ROE to 7% by 2028, with a goal to double shareholder returns [3] - The strategy includes improving asset quality by resolving historical issues in commercial real estate (CRE) and reducing credit costs to below 60 basis points [3] - The company plans to achieve a compound annual growth rate (CAGR) of approximately 14% in non-interest income over the next three years, focusing on wealth management for affluent clients and leveraging cross-border business advantages [3] Group 3: Asset Management - The company is actively disposing of non-performing assets related to real estate, with 77% of credit costs allocated to CRE-related exposures [4] - By the end of 2025, the company's exposure to mainland property developers accounted for 2.7% of total loans, a decrease of 2.2% year-on-year, while exposure to Hong Kong property developers accounted for 9.9%, a decrease of 1.6% [4] Group 4: Non-Interest Income - Non-interest income for 2025 increased by 28%, with fee income rising by 15% and contributions from wealth management and corporate fees showing double-digit growth [6] - Other non-interest income grew by 50%, primarily driven by client trading and market-making activities, which are considered stable fee-like revenues [6]