Ge Long Hui·2026-02-27 23:07Core Viewpoint - The company reported better-than-expected performance for Q4 2025, driven by resilient interest margins and strong wealth management income, with a full-year adjusted revenue of $71 billion, a year-over-year increase of 5.3%, and an adjusted net profit of $27.8 billion, up 12.5% [1] Performance Review - The company's Q4 2025 adjusted net interest income increased by 6% quarter-over-quarter and 8% year-over-year to $11.7 billion, supported by a 3% increase in deposits and rising HIBOR rates [1] - For the full year 2025, adjusted net interest income showed a slight year-over-year increase of 0.2%, primarily due to an 8% increase in deposits and contributions from structural hedging, with the net interest margin expected to decline by 8 basis points to 2.01% [1] Development Trends - The company expects to maintain low single-digit growth in adjusted net interest income for 2026, with a guidance of at least $45 billion, considering the impacts of interest rate cuts, asset growth, and structural hedging [1] - Deposit growth across all business segments is anticipated to be a key driver of profit growth in 2026, with the HK segment contributing $37 billion, accounting for 55% of the total deposit increase [2] Profit Forecast and Valuation - The company has adjusted its 2026 earnings forecast, increasing the net profit estimate by 4% to $27.9 billion and revenue forecast by 4% to $75.7 billion, reflecting a more favorable interest rate environment [2] - The target price has been raised by 25% to HKD 170.8, corresponding to a price-to-book ratio of 2.0x for 2026 and 1.9x for 2027, indicating a potential upside of 19.7% [2]