Core Viewpoint - Bank of America Securities has downgraded the target price for Hang Seng Bank from HKD 102 to HKD 93.6, a decrease of 8%, citing headwinds in earnings and low non-performing loan coverage, while maintaining an underperform rating [1] Financial Performance - Hang Seng Bank reported a 2.7% year-on-year increase in revenue, reaching HKD 21 billion, and a 3.9% increase in pre-provision profit to HKD 13.4 billion, exceeding market expectations by 2% and 6% respectively [1] - However, net profit fell by 34.6% year-on-year to HKD 6.3 billion, missing market expectations by 22%, primarily due to a doubling of provisions [1] - The return on equity (ROE) decreased by 4.5 percentage points to 7.9% year-on-year [1] Capital and Dividends - The Common Equity Tier 1 (CET1) ratio increased by 3.6 percentage points to 21.3%, partly due to the implementation of Basel III regulations [1] - The bank announced an 8.3% year-on-year increase in dividends to HKD 2.6 per share, with the payout ratio rising by 30 percentage points to 78% [1] Share Buyback and Future Projections - Hang Seng Bank has announced a share buyback plan of up to HKD 3 billion, expected to be completed within six months [1] - Earnings forecasts for 2025 to 2027 have been reduced by 10% to 18%, mainly due to rising credit costs, projected at 110 basis points, 85 basis points, and 75 basis points for the respective years [1] - The cost of equity has been lowered by 50 basis points to 8.5% due to a decline in the HIBOR, resulting in a decrease in the risk-free rate [1]

Core Insights - Bank of America Securities reported that Hang Seng Bank's revenue for the first half of the year increased by 2.7% year-on-year to HKD 21 billion, with pre-provision profit rising by 3.9% to HKD 13.4 billion, exceeding market expectations by 2% and 6% respectively [1][1][1] - However, net profit fell by 34.6% year-on-year to HKD 6.3 billion, missing market expectations by 22%, primarily due to a doubling of provisions [1][1][1] - The return on equity (ROE) decreased by 4.5 percentage points year-on-year to 7.9% [1][1][1] Financial Ratios and Capital - The Common Equity Tier 1 (CET1) ratio increased by 3.6 percentage points to 21.3% due in part to the implementation of Basel III regulations [1][1][1] - The interim dividend rose by 8.3% year-on-year to HKD 2.6 per share, with the payout ratio increasing by 30 percentage points to 78% [1][1][1] Share Buyback and Earnings Forecast - Hang Seng Bank announced a share buyback plan of up to HKD 3 billion, expected to be completed within six months [1][1][1] - Bank of America Securities lowered its earnings forecasts for Hang Seng Bank for 2025 to 2027 by 10% to 18%, mainly due to rising credit costs, projected at 110 basis points, 85 basis points, and 75 basis points for the respective years [1][1][1] - The cost of equity was reduced by 50 basis points to 8.5% due to a decline in HIBOR, which led to a decrease in the risk-free rate [1][1][1] Target Price Adjustment - The target price for Hang Seng Bank was lowered by 8% from HKD 102 to HKD 93.6, reflecting headwinds in earnings and a low non-performing loan coverage ratio, with a reiterated "underperform" rating [1][1][1]

Core Viewpoint - Macquarie has downgraded its earnings forecast for Pinduoduo for the next two years and reduced the target price to $126 due to weak first-quarter performance and challenges in revenue growth and monetization [1] Group 1: Financial Performance - Pinduoduo's first-quarter revenue was 14% lower than Macquarie's expectations and 8% below market expectations [1] - Adjusted net profit margin was down by 2.3 and 9 percentage points compared to Macquarie's and market forecasts respectively [1] Group 2: Future Outlook - Macquarie anticipates that Pinduoduo's revenue growth will lag behind GMV growth and face monetization challenges, leading to a decrease in short-term attractiveness [1] - The firm believes that the current valuation level reflects most of the downside risks, maintaining an outperform rating despite the challenges [1] Group 3: Earnings Forecast Adjustment - Macquarie has lowered its earnings forecasts for 2025 and 2026 by 17% and 6% respectively [1] - The target price for Pinduoduo has been reduced from $153 to $126 [1]