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]

Core Viewpoint - The surge in demand for Hong Kong bank accounts is driven by the recovery of the Hong Kong stock market, cross-border wealth management needs, and high talent programs, making Hong Kong bank accounts a vital link to international markets [1][4]. Group 1: Challenges in Opening Accounts - Mainland users face significant difficulties in scheduling appointments and waiting in line when applying for Hong Kong bank accounts [3][8]. - Most intermediaries indicate that proxy applications are no longer feasible, and clients must visit Hong Kong in person, although they can provide guidance and strategies for the process [5][11]. Group 2: Market Trends and Opportunities - Since 2024, there has been a noticeable increase in mainland users traveling to Hong Kong for bank card applications, with a continued rise in interest into 2025 [4][18]. - The number of new private clients at HSBC Hong Kong increased from 130,000 in Q1 2024 to 300,000 in Q1 2025, indicating a growing trend in account openings [18]. Group 3: Role of Intermediaries - A new wave of intermediaries has emerged to assist clients with the account opening process, offering services ranging from appointment scheduling to full guidance [5][7]. - Intermediaries are categorized into two types: those providing accompanying services and those with close ties to banks, some claiming to facilitate account openings without clients needing to visit Hong Kong [5][12]. Group 4: Financial Incentives - The interest in opening Hong Kong bank accounts is partly due to the higher interest rates on savings and investment products compared to mainland offerings, with some Hong Kong banks offering rates above 3.5% for USD deposits [19][20]. - The Hong Kong Monetary Authority reported a 7.09% increase in total deposits and a 14.24% increase in USD deposits in 2024, highlighting the attractiveness of Hong Kong's financial products [19]. Group 5: Regulatory Environment - The regulatory environment for opening accounts in Hong Kong has become stricter, with banks requiring proof of identity, address, and minimum deposit amounts [20][21]. - Frequent large transactions or long periods of inactivity can attract regulatory scrutiny, leading to potential account freezes or investigations [21].

Core Viewpoint - The Hong Kong Monetary Authority is discussing the 3.0 version of the Cross-Border Wealth Management Connect, which may include changes in quotas, product range, sales processes, and the possibility of expanding from the nine pilot cities in the Greater Bay Area to other cities nationwide [1][2][3]. Group 1: Current Status of Cross-Border Wealth Management Connect - As of now, the number of accounts for investing in global products through the Cross-Border Wealth Management Connect has increased from 25,000 to 95,000 [1]. - The number of individual investors participating in the program in the Greater Bay Area has reached 145,300, with an increase of 3,832 in February [4]. - The total amount of cross-border fund transfers through the closed-loop transfer channel has reached 105.64 billion yuan [4]. Group 2: Changes in Version 3.0 - The 3.0 version is expected to modify the product range, with the Northbound Connect covering fixed income and equity investment products, public funds with risk levels R1 to R4, and RMB deposit products [3]. - The Southbound Connect will include products registered in Hong Kong that are primarily invested in Greater China stocks, excluding single emerging market stock funds and high-yield bond funds [3]. - There is a potential expansion of participant cities from the current nine cities in the Greater Bay Area to other cities across the country [3]. Group 3: Fund Transfer Statistics - In February, the amount of cross-border fund transfers through the Northbound Connect was 0.11 billion yuan, while the Southbound Connect accounted for 26.44 billion yuan [4]. - The total amount of cross-border fund transfers between the nine mainland cities and Hong Kong reached 14.44 billion yuan, with Shenzhen accounting for 54.4% of this total [4]. - As of March 26, 2025, the Southbound Connect has a net outflow of 15.46 billion yuan, with a remaining quota of 134.54 billion yuan, while the Northbound Connect has a net inflow of 25.04 million yuan, with a remaining quota of 149.75 billion yuan [5].

Core Viewpoint - The Hong Kong Monetary Authority is discussing the 3.0 version of the Cross-Border Wealth Management Connect, which may include changes in quotas, product range, sales processes, and the possibility of expanding from the nine pilot cities in the Greater Bay Area to other cities nationwide [1][3]. Summary by Sections Current Status of Cross-Border Wealth Management Connect - The number of accounts for investing in global products through the Cross-Border Wealth Management Connect has increased from 25,000 to 95,000 [2]. - As of February, the number of individual investors participating in the program from the Greater Bay Area has risen by 3,832 to 145,300, with a total cross-border fund transfer amount reaching 105.64 billion yuan [2][5]. Developments in Cross-Border Wealth Management Connect 3.0 - Discussions for the 3.0 version are focusing on potential changes in product range and participating cities [4]. - The current product range includes fixed income and equity investment products, public funds with risk levels R1 to R4, and RMB deposit products for the northbound channel, while the southbound channel includes Hong Kong-registered funds primarily investing in Greater China [4]. Participation and Fund Flow - The current participant scope includes Hong Kong residents and residents from the nine cities in the Greater Bay Area who have lived there for at least two years [4]. - As of February, the cross-border fund transfer amount through domestic banks was 18.14 billion yuan, accounting for 68.3% of the total, while securities companies handled 8.41 billion yuan, making up 31.7% [6]. Fund Quotas and Usage - As of March 26, 2025, the southbound channel has a net outflow of 15.46 billion yuan, with 10.31% of the quota used, leaving a remaining quota of 134.54 billion yuan [6]. - The northbound channel has a net inflow of 25.04 million yuan, with only 0.17% of the quota used, leaving a remaining quota of 149.75 billion yuan [6].