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<Research>CICC: Decline in Div./ Buyback Yield Caused by HANG SENG BANK Privatization May Drag HSBC HOLDINGS Temporarily
Recommend 13 Positive 22 Negative 19 |
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HSBC HOLDINGS (00005.HK) announced last Thursday (9th) its plan to acquire 680 million shares of HANG SENG BANK (00011.HK) at HKD155 per share in cash, with a total acquisition price of HKD106 billion (around USD 13.6 billion), according to a report from CICC. The acquisition will bring HSBC HOLDINGS' stake in HANG SENG BANK from 63% to 100%. If progress is smooth, the company expects to gradually complete the privatization by mid-2026. CICC gave HSBC HOLDINGS an Outperform rating and a target price of HKD111.9. In the short term, the decline in the dividend + buyback yield may drag HSBC HOLDINGS' stock performance. In the medium to long term, attention should be paid to whether the synergies brought by the acquisition can sustainably boost per-share equity and the situation of buyback recovery after three quarters. From the perspective of the dividend + buyback yield, the acquisition will sink HSBC HOLDINGS' dividend + buyback yield for FY26 to 7.5% (return rate from 4Q25 to 3QFY26 down to 6.2%). The cost-effectiveness may drop when compared to STANCHART's (02888.HK) 8.8%. AAStocks Financial News |
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