<Research>G Sachs: APAC Banks Demonstrate Consistent Growth This Year; Indonesian Banks Preferred
Banking Growth Outlook: Goldman Sachs predicts continued growth in the banking sector for ASEAN and Hong Kong banks from 2025 into 2026, driven by strong deposit inflows rather than traditional loan growth.
Profitability Expectations: Regional banks are expected to see improved profitability and potential upward revisions in earnings guidance, particularly for Indonesian banks due to easing funding cost pressures.
Valuation Insights: Compared to global peers, regional banks' valuations remain undemanding, suggesting room for growth and positive catalysts in the coming years.
Stock Ratings: Various banks across Thailand, Indonesia, Singapore, and the Philippines received updated ratings and target prices, with several banks in Indonesia and Singapore being rated as "Buy."
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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.
