Core Insights - The People's Bank of China Shenzhen Branch and the State Administration of Foreign Exchange Shenzhen Branch held a press conference to discuss the financial operations in Shenzhen for the third quarter of 2025 [1] - The "Cross-Border Wealth Management Connect" 2.0 optimization measures have been well received, with approximately 31,000 new individual investors added in Shenzhen [1] - The total cross-border payment amount reached 50.74 billion yuan, accounting for nearly 50% of the Greater Bay Area's total, with a business scale growth of over 8 times compared to the 1.0 phase [1]

Core Viewpoint - East Asia Bank has opened its flagship branch in Shenzhen's Futian district, aiming to provide financial services to high-net-worth clients and talents traveling between Shenzhen and Hong Kong, leveraging the synergy between mainland China and Hong Kong [2] Group 1: Business Expansion - The new flagship branch is strategically located near the Futian High-Speed Railway Station to cater to cross-border clients [2] - The bank has observed a significant increase in its affluent client base in the Greater Bay Area, with a 39% growth in the first half of the year [2] - There has been a 54% increase in clients traveling south to Hong Kong, and the assets under management (AUM) for cross-border wealth management have surged by nearly 90% [2] Group 2: Strategic Focus - The bank plans to actively develop its cross-border wealth management business to capitalize on the growing wealth in the Greater Bay Area [2]

Core Viewpoint - The expansion of cross-border wealth management products in the Greater Bay Area provides new investment options for mainland investors, particularly through the "Southbound Pass" mechanism [1][4]. Summary by Sections Product Range Adjustment - China Merchants Yonglong Bank has revised the terms and conditions for the "Southbound Pass," significantly altering the definition of "designated wealth management products" by removing previous restrictions on investment types, including stocks, non-complex funds, and low to medium-risk bonds [2][4]. - The revised definition now includes "wealth management products permitted by regulatory authorities," effective from October 27, 2025 [2][4]. Inclusion of Structured Deposits - The bank has expanded the range of "designated wealth management products" to include structured deposits, which were previously excluded. This change aims to broaden investment choices for clients while maintaining the same risk level requirements [5][6]. - Structured deposits are defined as a supplementary form of general deposits, often linked to currencies or commodities, providing potential additional returns based on market performance [6]. Market Response and Product Availability - Some banks participating in the "Southbound Pass" have already begun offering structured products, while others have yet to do so. For instance, Bank of China (Hong Kong) and China CITIC Bank International have included structured deposits in their offerings, while HSBC and others have not yet listed such products [7][9]. - As of August, there were 167,100 individual investors participating in the "Southbound Pass," with a total cross-border fund transfer amounting to 123.55 billion yuan [9][10]. Future Developments - The Hong Kong Monetary Authority is discussing "Cross-Border Wealth Management Connect 3.0," which aims to optimize various aspects of the program, including eligibility, product range, and sales processes, with potential expansion beyond the Greater Bay Area [9].

Core Viewpoint - The "Cross-Border Wealth Management Connect" is set to expand its geographical reach and product offerings, with a 3.0 version draft expected by the end of this year, aimed at enhancing market vitality [1][3]. Group 1: Expansion Plans - The Hong Kong Financial Secretary, Paul Chan, announced plans to expand the "Cross-Border Wealth Management Connect" to regions beyond the Guangdong-Hong Kong-Macao Greater Bay Area, supported by central government initiatives [1]. - The 3.0 version is anticipated to include more cities, with strong expectations for the inclusion of major cities like Beijing and Shanghai, which have significant overseas investment demand [3]. Group 2: Current Status and Participation - As of July 2025, the total number of individual investors participating in the "Cross-Border Wealth Management Connect" has reached 164,600, with 53,000 from Hong Kong and Macao, and 111,600 from mainland China [4]. - The total cross-border remittance limit under the 2.0 version is set at 150 billion yuan, with current remittance levels remaining ample, as evidenced by 109.67 billion yuan in remittances between mainland China and Hong Kong, accounting for 90.7% of the total [5]. Group 3: Financial Transactions - In July 2025, the mainland banks processed 2.464 billion yuan in cross-border remittances, representing 84.5% of the month's total transactions, while securities companies accounted for 15.5% with 451 million yuan [6]. - Cumulatively, by the end of July 2025, mainland banks had facilitated 115.59 billion yuan in cross-border remittances, compared to 5.33 billion yuan by securities companies [6].

Core Viewpoint - The Hong Kong Financial Secretary, Paul Chan, announced plans to appropriately expand the "Cross-Border Wealth Management Connect" program with support from central authorities to enhance market vitality [1] Group 1: Program Expansion - The expansion will include an increase in the geographical scope, product types, and participant groups [1] - Regulatory bodies from both regions are currently researching and discussing the optimization of the Cross-Border Wealth Management Connect 3.0 version, with a draft expected by the end of this year [1] Group 2: Market Expectations - Industry professionals, such as the head of international wealth management at CICC, expressed strong anticipation for the optimized 3.0 version, particularly the inclusion of major cities beyond the Greater Bay Area, specifically Beijing and Shanghai [1] - There is a significant demand from investors in these first-tier cities for overseas asset allocation [1]

Core Viewpoint - Huahua Wealth Management has launched a new financial product, the Global Gain Huahua Trend Guide, in collaboration with Standard Chartered Bank, marking its first partnership with a foreign bank for product distribution [1][2]. Group 1: Product Overview - The Global Gain Huahua Trend Guide is a "fixed income plus" investment strategy product, with a minimum holding period of one month, and includes allocations to overseas CIO-selected funds [1]. - The product is designed to provide a convenient experience of "global assets, local services" by leveraging Standard Chartered's global channels and professional services [1][2]. Group 2: Fund Management and Strategy - The CIO funds are managed by the French asset management firm, Amundi, and are based on a selection framework that aims to provide multi-asset investment solutions [2]. - Since September 2022, Standard Chartered has sold the CIO fund series across 12 global markets, with assets under management exceeding $2.5 billion, approximately 178 billion RMB, indicating strong market recognition [2]. Group 3: Competitive Advantages - The product features three main advantages: low entry barriers to global investment resources, a cross-border and global asset allocation approach, and a top-tier risk management system [2]. - Huahua Wealth Management aims to leverage its global resource advantages and deep insights into the local market to offer a comprehensive global multi-asset investment solution [3].

Investment Rating - The investment rating for Standard Chartered Group is maintained at "Buy" [1] Core Views - The recent public sentiment disturbance due to allegations against Standard Chartered regarding illegal payments to sanctioned entities has led to a stock price correction, which is viewed as a potential opportunity for increased allocation [1][2] - Despite short-term volatility, the long-term value proposition remains strong, supported by the bank's extensive network and licenses in emerging markets, positioning it well for growth in transaction banking and wealth management [1][3] - The bank's wealth management business is expected to benefit from strong global cross-border asset allocation demand, with a projected double-digit CAGR in wealth management revenue from 2024 to 2029 [1][4] Summary by Sections Investment Rating - The target price is set at HKD 164.30, with the current closing price at HKD 139.60, indicating potential upside [1][8] Financial Performance - The forecasted net profit for 2025 is USD 4.33 billion, with a projected PB of 0.85 times [5] - The bank's revenue is expected to grow from USD 19.70 billion in 2024 to USD 22.32 billion in 2027, with a steady increase in net profit margins [11][14] Market Positioning - Standard Chartered has a unique advantage in cross-border business due to its deep integration in emerging markets, particularly in ASEAN, which is a key destination for global industrial transfer [3] - The bank's light capital model helps mitigate the impact of interest rate cuts on revenue, maintaining a low exposure to commercial real estate in Hong Kong [3] Wealth Management Growth - The wealth management segment has seen a 23.1% year-on-year increase in revenue for the first half of 2025, with 135,000 new client accounts opened [4] - The bank's strategy includes a diverse product offering that covers high-quality global assets, catering to affluent clients [4]

Group 1 - The core viewpoint of the article highlights the positive market response to the "Cross-Border Wealth Management Connect" 2.0 optimization measures since their implementation [1] - As of the end of June this year, over 160,000 individual investors have participated in the program, representing an increase of over 120% compared to version 1.0 [1] - The total market value of investments held by Hong Kong participating institutions in the southbound scheme has reached over 16 billion RMB, showing a twofold increase compared to "Cross-Border Wealth Management Connect" 1.0 [1] Group 2 - Investors in the southbound scheme are increasingly diversifying their product choices, moving from primarily deposit products to a growing allocation in funds and bonds [2]

Group 1 - The core viewpoint of the article highlights the positive market response to the "Cross-Border Wealth Management Connect" 2.0 optimization measures, with over 160,000 individual investors participating as of the end of June, representing an increase of over 120% compared to version 1.0 [1] - In the southbound scheme, the market value of holdings by Hong Kong participating institutions has exceeded 16 billion RMB, showing a twofold increase compared to version 1.0 [1] - The diversification of product choices for southbound investors has evolved from primarily deposit products to an increasing allocation in funds and bonds [1] Group 2 - The 2.0 optimization measures introduced last year include increased quotas, expanded product offerings, relaxed investor thresholds, a broader range of participating institutions, and improved sales promotion arrangements [1] - Recent collaborative efforts between the Hong Kong Monetary Authority and mainland regulatory bodies have led to the introduction of measures such as "one-time consent," "three-party online meetings," and non-face-to-face account opening for southbound accounts [1] - Six banks have already implemented the "one-time consent" arrangement to proactively introduce products and provide information to clients, with ten more banks planning to adopt this arrangement [1]

Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of HKD 137.46 [8] Core Views - The company demonstrates growth potential, stable operational capabilities, and excellent shareholder returns, supported by its extensive network and licensing advantages in emerging markets [16][19] - The restructuring of global supply chains and the rising demand for cross-border wealth management are expected to provide significant growth opportunities for the company's transaction banking and wealth management businesses [4][18] Summary by Sections Investment Highlights - The company has a strong presence in emerging markets, with over 75% of its global branches overlapping with "Belt and Road" markets, enhancing its cross-border business foundation [16][19] - The company has shifted its operational strategy since 2015, reducing loan exposure and focusing on lower-risk sectors, resulting in a robust asset quality with a local real estate exposure of less than 1% of total loans [4][19] Business Growth Drivers - The demand for cross-border asset allocation is increasing, with the company positioned to benefit from the growth of wealth management in high-growth centers like Hong Kong, Singapore, and the UAE [3][18] - The company reported a 28% year-on-year increase in wealth management income in Q1 2025, with a significant inflow of new affluent clients [3][18] Financial Projections - The forecasted net profit for the company is USD 3.83 billion in 2025, with a projected compound annual growth rate (CAGR) of double digits for wealth management income from 2025 to 2029 [5][18] - The company aims for a target price-to-book (PB) ratio of 0.85 for 2025, with a target price of HKD 137.46, reflecting its growth potential despite short-term interest margin fluctuations [5][8] Risk Management - The company has effectively managed its existing risks, with a non-performing loan ratio projected to remain stable around 2.13% in the coming years [7][19] - The company’s diversified global network is expected to mitigate the impact of tariff uncertainties on its cross-border business [17][33]