Core Viewpoint - HSBC's privatization of Hang Seng Bank aims to invest in Hong Kong and enhance the competitiveness and profitability of its core wealth management business in the region [1] - Post-privatization, HSBC's ROTE is expected to increase by nearly 2 percentage points, rising from around 16% to 18%-19%, reaching a top-tier level in global banking [1][2] Summary by Sections Privatization Strategy - The privatization of Hang Seng is not a response to risks in Hong Kong's real estate market; it is a strategic move to gain full control over Hang Seng, which has been a subsidiary since 1965 [1] - The current pressures in Hong Kong's commercial real estate market are subsiding, and HSBC's provisions are deemed sufficient, alleviating excessive market concerns [1] Expected Impact on Profitability - The reduction of minority interests is projected to boost HSBC's ROTE by approximately 0.55 percentage points, leading to more stable performance [2] - Cost-income ratio improvements are anticipated to enhance HSBC's ROTE by about 0.2 percentage points as Hang Seng's costs align more closely with HSBC's Hong Kong operations [2] - The integration of wealth management services is expected to drive a "volume increase + price enhancement," contributing an additional 1 percentage point to HSBC's ROTE [2][3] Wealth Management Business Potential - Hang Seng's AUM growth rate and unit AUM yield currently lag behind those of HSBC Hong Kong and HSBC Group [3] - Post-privatization, if Hang Seng's AUM growth aligns with HSBC's 20%-30% and unit AUM fee rates reach 0.6%-0.7%, it could significantly boost HSBC's wealth management revenue and ROTE by approximately 1 percentage point [3] Target Price Adjustment - HSBC's target valuation has been raised to 2.25 times PTB (2 times PB), with a target price of HKD 180, maintaining a buy rating and a top pick in the banking sector [3]

Core Viewpoint - Goldman Sachs has upgraded Standard Chartered Group's rating from "Neutral" to "Buy" and raised the target price by 21% from HKD 168 to HKD 203, indicating further revaluation potential despite an 83% increase in the stock price this year [1] Group 1: Rating and Price Target - Goldman Sachs has raised Standard Chartered's rating to "Buy" and increased the target price to HKD 203, reflecting a 21% increase from the previous target [1] - The bank believes there is still room for further revaluation of Standard Chartered's stock [1] Group 2: Return on Equity Expectations - Goldman Sachs projects that Standard Chartered's underlying return on tangible equity (ROTE) will reach 14.6% by the end of this year, exceeding the management's guidance of 13% [1] - The ROTE is expected to further increase to 15% in 2027 and 15.7% in 2028 [1] - An upward revision of the mid-term ROTE guidance is anticipated during the 2025 financial report or the investor day in May 2026, which could act as a catalyst for the stock price [1] Group 3: Shareholder Returns - Standard Chartered is expected to provide attractive returns to shareholders, with a projected total return (dividends + buybacks) of 8.4% by 2026 [1] - The long-term total payout ratio is expected to be maintained at 80% due to strong capital generation capabilities [1] - Share buyback forecasts for 2028-2029 have been increased from USD 2.5 billion to USD 2.8 billion annually, and the dividend payout ratios for 2026-2028 have been revised from a fixed 21% to 25%/30%/35% respectively [1] - The revised forecasts indicate an average total payout ratio of 75% for 2026-2028, supporting ROTE improvement and valuation revaluation [1]