Citi Reports: BANK OF E ASIA (00023.HK) Exceeds Revenue Expectations in 2H25; Profit Impacted by Increased Impairment Losses
Earnings Report: BANK OF E ASIA reported a profit of $947 million for 2H25, a significant decline of 58% HoH and 57% YoY, falling short of market expectations by 36%.
Factors Affecting Earnings: The earnings miss was attributed to increased credit costs, property revaluation losses, and one-off expenses, including losses from associated companies.
Performance Metrics: The bank's PPOP was $5.8 billion, reflecting a 6% increase HoH and 1% YoY, driven by strong net interest and trading income.
Dividends and Ratings: BANK OF E ASIA declared a second interim dividend of $0.22, with a full-year payout ratio of 50%, and Citi Research rated the bank as Neutral with a target price of $14.9.
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Citi Upgrades BANK OF E ASIA to Buy Rating and Increases Target Price to HKD16
Strategic Guidance: BANK OF E ASIA aims to increase its ROE target to 7% by 2028, up from 3.1% in 2025, with market expectations at 5.1%, according to a Citi report.
Dividend Projections: The bank's dividend target for 2028 is set to double from the 2025 level, projecting a DPS of approximately HKD1.2.
Citi's Forecast: Citi forecasts that ROE will reach 6% by 2028, which is below the bank's target but above the general market forecast of 5.1%.
Stock Upgrade: Following its inclusion in the Hang Seng Composite Index, Citi upgraded BANK OF E ASIA from Neutral to Buy, raising the target price from HKD14.9 to HKD16.
G Sachs Assigns Sell Rating to BANK OF E ASIA, Increases Target Price to HKD14; 2H25 Net Profit Expected to Fall Short
Bank of East Asia's Profit Decline: The Bank of East Asia reported a 57% year-over-year drop in net profit for 2H25, totaling HKD947 million, which was 34% below Goldman Sachs' forecast.
Impairments and Losses: The significant profit decline was attributed to a HKD625 million impairment on investment properties and a one-time loss from its associate, Guotong Trust, in China.
Goldman Sachs' Rating and Target Price: Goldman Sachs maintained a Sell rating on the Bank of East Asia while raising its target price from HKD13.5 to HKD14.
Market Activity: The bank's stock experienced a short selling of $13.29 million, with a short selling ratio of 11.105%.
CICC Increases Target Price for BANK OF E ASIA (00023.HK) to $18.03, Maintains Neutral Rating
Company Performance: Bank of East Asia's 2025 results fell short of expectations, with operating income at $21 billion (up 0.2% YoY) and net profit at $3.2 billion (down 20.1% YoY), primarily due to one-off factors and property impairment.
Future Outlook: CICC has a positive outlook, raising its 2026/2027 net profit forecasts by 42.5% and 49%, respectively, and increasing operating income forecasts, leading to a 28% target price increase to $18.03 while maintaining a Neutral rating.
HSBC Research Increases BANK OF E ASIA's Target Price to HKD14.8; Previous Year's Earnings Fall Short
Earnings Forecasts: HSBC Global Research reports that BANK OF E ASIA's 2025 EPS is projected to drop by 20% YoY to HKD1.22, missing market expectations by 13.8% and 15.9%.
Dividends and Payout Ratio: The bank's dividends have decreased by 11.6% to HKD0.61, with the payout ratio increasing from 45% in 2024 to 50%.
Revised Earnings Estimates: HSBC has adjusted its earnings forecasts for BANK OF E ASIA for 2026-27 down by 3.5% and 12.4%, respectively.
Target Price Update: Despite the lowered earnings outlook, HSBC maintains a Hold rating on the stock and has raised its target price from HKD14 to HKD14.8.
HSI Closes 465 Points Lower; AIA and Stanchart Drop 4%; Commodity Stocks Decline
Market Overview: The DJIA fell 1.3% as tech stocks were sold off, leading to a similar decline in the Hong Kong stock market, where the HSI ended down 1.7% at 26,567.
Financial Sector Performance: Major financial stocks like HSBC and HKEX dropped by 2.7% and 2.1%, respectively, while Bank of East Asia plunged 11% after reporting a significant profit drop and dividend cut.
Commodity and Gold Prices: Gold prices fell below USD 5,000/oz, impacting gold mining stocks, which saw declines of 5.9-7.6%. Oil prices also dropped nearly 3%, affecting major oil companies.
Tech Sector Decline: The tech sector experienced minor declines, with Tencent and Alibaba seeing drops of around 0.7% to 2.0%, while other tech stocks like Meituan and Baidu fell over 3%.
BANK OF E ASIA: Commercial Real Estate NPL Ratio Reaches 8% by End of 2025; Market Indicates Stabilization Signs
Cautious Outlook on Real Estate: Adrian Li, Co-CEO of BANK OF E ASIA, expresses caution regarding Hong Kong's commercial real estate market, indicating potential for further impairments despite signs of stabilization in prime office locations.
Rising Non-Performing Loans: Ivy Chan, General Manager and Group Chief Risk Officer, reports an increase in the bank's non-performing loan ratio for commercial real estate in Hong Kong, rising to approximately 8% by the end of 2025 from 7.5% in the first half of the year.
Citi Upgrades BANK OF E ASIA to Buy Rating and Increases Target Price to HKD16
Strategic Guidance: BANK OF E ASIA aims to increase its ROE target to 7% by 2028, up from 3.1% in 2025, with market expectations at 5.1%, according to a Citi report.
Dividend Projections: The bank's dividend target for 2028 is set to double from the 2025 level, projecting a DPS of approximately HKD1.2.
Citi's Forecast: Citi forecasts that ROE will reach 6% by 2028, which is below the bank's target but above the general market forecast of 5.1%.
Stock Upgrade: Following its inclusion in the Hang Seng Composite Index, Citi upgraded BANK OF E ASIA from Neutral to Buy, raising the target price from HKD14.9 to HKD16.
G Sachs Assigns Sell Rating to BANK OF E ASIA, Increases Target Price to HKD14; 2H25 Net Profit Expected to Fall Short
Bank of East Asia's Profit Decline: The Bank of East Asia reported a 57% year-over-year drop in net profit for 2H25, totaling HKD947 million, which was 34% below Goldman Sachs' forecast.
Impairments and Losses: The significant profit decline was attributed to a HKD625 million impairment on investment properties and a one-time loss from its associate, Guotong Trust, in China.
Goldman Sachs' Rating and Target Price: Goldman Sachs maintained a Sell rating on the Bank of East Asia while raising its target price from HKD13.5 to HKD14.
Market Activity: The bank's stock experienced a short selling of $13.29 million, with a short selling ratio of 11.105%.
CICC Increases Target Price for BANK OF E ASIA (00023.HK) to $18.03, Maintains Neutral Rating
Company Performance: Bank of East Asia's 2025 results fell short of expectations, with operating income at $21 billion (up 0.2% YoY) and net profit at $3.2 billion (down 20.1% YoY), primarily due to one-off factors and property impairment.
Future Outlook: CICC has a positive outlook, raising its 2026/2027 net profit forecasts by 42.5% and 49%, respectively, and increasing operating income forecasts, leading to a 28% target price increase to $18.03 while maintaining a Neutral rating.
HSBC Research Increases BANK OF E ASIA's Target Price to HKD14.8; Previous Year's Earnings Fall Short
Earnings Forecasts: HSBC Global Research reports that BANK OF E ASIA's 2025 EPS is projected to drop by 20% YoY to HKD1.22, missing market expectations by 13.8% and 15.9%.
Dividends and Payout Ratio: The bank's dividends have decreased by 11.6% to HKD0.61, with the payout ratio increasing from 45% in 2024 to 50%.
Revised Earnings Estimates: HSBC has adjusted its earnings forecasts for BANK OF E ASIA for 2026-27 down by 3.5% and 12.4%, respectively.
Target Price Update: Despite the lowered earnings outlook, HSBC maintains a Hold rating on the stock and has raised its target price from HKD14 to HKD14.8.
HSI Closes 465 Points Lower; AIA and Stanchart Drop 4%; Commodity Stocks Decline
Market Overview: The DJIA fell 1.3% as tech stocks were sold off, leading to a similar decline in the Hong Kong stock market, where the HSI ended down 1.7% at 26,567.
Financial Sector Performance: Major financial stocks like HSBC and HKEX dropped by 2.7% and 2.1%, respectively, while Bank of East Asia plunged 11% after reporting a significant profit drop and dividend cut.
Commodity and Gold Prices: Gold prices fell below USD 5,000/oz, impacting gold mining stocks, which saw declines of 5.9-7.6%. Oil prices also dropped nearly 3%, affecting major oil companies.
Tech Sector Decline: The tech sector experienced minor declines, with Tencent and Alibaba seeing drops of around 0.7% to 2.0%, while other tech stocks like Meituan and Baidu fell over 3%.
BANK OF E ASIA: Commercial Real Estate NPL Ratio Reaches 8% by End of 2025; Market Indicates Stabilization Signs
Cautious Outlook on Real Estate: Adrian Li, Co-CEO of BANK OF E ASIA, expresses caution regarding Hong Kong's commercial real estate market, indicating potential for further impairments despite signs of stabilization in prime office locations.
Rising Non-Performing Loans: Ivy Chan, General Manager and Group Chief Risk Officer, reports an increase in the bank's non-performing loan ratio for commercial real estate in Hong Kong, rising to approximately 8% by the end of 2025 from 7.5% in the first half of the year.
