The Zhitong Finance App learned that HSBC Holdings (00005) fell by more than 3%. As of press release, it was down 3.1% to HK$131.5, with a turnover of HK$1,065 billion.
According to the news, Damo released a research report saying that the recent decline in HSBC Holdings' stock price has made short-term valuations more attractive. The bank believes that recent adjustments have been excessive, and it is expected that the stock price will rise relative to the market index in the next 15 days. The bank pointed out that HSBC Holdings' third quarter results showed that wealth management capital flows remained steady, and the group is expected to have more capital space in 2027. Increased competition for deposits will put pressure on net interest spreads, but relatively many of HSBC Holdings' peers are in a better position. The current price is equivalent to the predicted dividend yield of 5.4% in 2027, and the price-earnings ratio is 9.4 times. The bank believes that it is attractive compared to the valuations of Hong Kong, China and ASEAN financial stocks.
Xiaomo, on the other hand, pointed out that the focus of HSBC Holdings' third-quarter analyst briefing was neutral to negative. Management acknowledged the intensification of deposit competition between the UK and Hong Kong, with the Hong Kong market under greater pressure. Considering that Hong Kong's loan-to-deposit ratio is only 43%, this situation came as a surprise to the bank. Management also reminded the market to pay attention to the impact of the sale of business. Of the $2.2 billion related revenue loss, about half is expected to be reflected in net interest income by 2028. Cost realignment is expected to generate incremental revenue that exceeds the revenue loss described above, but there is a time lag.