＜Research＞China Securities: HSBC's Appointment of Existing CFO as New CEO Keeps Internal Promotion Tradition, Ensures Core Strategy Consistency

　　China Securities reported that the post of CEO at HSBC HOLDINGS (00005.HK) +0.550 (+0.818%) Short selling $90.51M; Ratio 35.380% will be taken by the incumbent CFO, continuing the tradition of internal promotion at the helm of HSBC, which ensured the consistency of the lender's core strategy. Confirming the new CEO before 3Q24 will help HSBC to communicate to the market clearer medium- and long-term performance targets and specific development plans ahead of the upcoming interest rate cut cycle, thereby stabilising market confidence and expectations.

　　In the longer term, China Securities believed HSBC's increasing trade and investment volumes would ensure that it can effectively hedge against interest rate volatility as the process of global industrialisation progresses. As a result, HSBC's revenue growth, ROTE and dividend returns are extremely robust, effectively freeing it from the long-term constraints of interest rate cyclicality, and achieving sustained and stable valuation gains.

　　Related NewsJPM: HSBC Appoints Georges Elhedery as New CEO; Strategy Expected to Keep Continuity

　　China Securities forecasted HSBC's 2024 cash dividend payout ratio at 67% (including a one-off special dividend of 17%), share buybacks at US$9 billion, total return on shareholders' cash at 106%, and aggregate dividend yield at 15.3%. Group ROTE is projected to be between 14.5% to 14.9% from 2024 to 2026. Backed by strong performance, the dividend payout level is robust and sustainable.

　　The broker maintained HSBC's Buy rating, kept it as a top pick in the banking sector, and gave it a target price of HK$83.5.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-18 12:25.)

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