CICC has kept its profit forecast for
HSBC HOLDINGS
largely unchanged. The bank trades at 1.8x/1.7x 2026E/2027E P/B. The firm maintains its target price of HKD 170.80, corresponding to 2.1x/2.0x 2026E/2027E P/B with a 17.71% upside, and reiterates its Outperform rating.
The bank recently held an Investor Day, detailing its strategy and operational specifics. The focus is on "Simpler, More Efficient": concentrating on core business strengths to continuously reinforce its competitive moat. The company restructured its operations in January 2025, emphasizing a "dual local universal banking model (HK, UK) + cross-border business (CIB, IWPB)". It states it is now the leading universal bank in Hong Kong, the top trade bank in the UK, the leading transaction bank in Asia, and the foremost wealth management bank in Asia, possessing strong competitiveness across these four key areas.
The strategy is "Customer-Centric": operational strengths provide a robust customer base. On the retail side, HSBC Hong Kong and Hang Seng Bank have over 7 million and 3 million retail customers, respectively. For context, Hong Kong's resident population was only about 7.5 million at the end of 2025. On the corporate side, HSBC Hong Kong serves 367,000 corporate clients, covering 95% of Asia's top 200 companies and 95% of Asia's top 100 financial institutions. Hang Seng Bank has nearly 100,000 corporate clients, serving one in every four small and medium-sized enterprises in Hong Kong.
This high-quality clientele unlocks multiple operational values. It helps accumulate low-cost liabilities. The bank disclosed at an Asia investor seminar that instant (demand-like) deposits account for up to 70% of its total, better than the industry average, attributed to customer trust and natural deposit accumulation within its integrated financial service processes. Better client quality leads to superior asset quality, as top-tier corporate clients possess stronger risk resilience. For example, in HSBC Hong Kong, an estimated 75% of corporate revenue comes from multinational corporations, and 77% of retail revenue originates from affluent and higher-tier customers.
The value per client for top cross-border customers is significantly higher. The company revealed that for HSBC Hong Kong, the value per large international client/mid-sized international client is 65 times/20 times that of an average corporate client. The value per Premier/Advance client is 65 times/10 times that of an ordinary banking client (HSBC One).
The bank is identifying and capitalizing on sustainable growth opportunities. The "HSBC + Hang Seng" dual-brand strategy aims to capture Hong Kong's role as a "super-connector". The Asia investor seminar highlighted Hong Kong as a leading global cross-border wealth center, with its cross-border Assets Under Management (AUM) projected to grow by approximately $1 trillion by 2029. HSBC has a powerful global network, while Hang Seng Bank possesses deep local expertise. Together, they serve around 10 million individual customers in Hong Kong. The CEO noted that since 2023, about two-thirds of HSBC Hong Kong's new retail customers are non-Hong Kong residents, and over 50% of Hang Seng Bank's new clients are from mainland China.
There are also wealth management opportunities in Asia and the Middle East. In terms of market potential, the bank assesses the Asian wealth management market as vast, with personal financial assets expected to maintain a compound annual growth rate of around 6% until 2030. Regarding penetration, while the bank currently has 5 million Premier clients globally, two-thirds of them are not yet using its wealth management products. The company is increasing investment in global wealth centers and frontline staff while leveraging its CIB division to enhance internal cross-selling and client referrals.
Cross-border business demand in Asia continues to grow. The company disclosed that currently about 65% of cross-border client revenue comes from clients whose home markets are in the Americas, Europe, and the UK, with 45% of that flowing into Asia. Approximately 70% of its cross-border client revenue is generated within Asia and flows to other Asian markets.
Risks include wealth management business growth falling short of expectations and macroeconomic downturns negatively impacting asset quality.
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