HSBC HOLDINGS (005) will distribute its annual results this Wednesday. According to HSBC's comprehensive average forecast from multiple brokerages, its reported pre-tax profit last year fell by 10.7% year-on-year to USD 28.861 billion (approximately HKD 225.116 billion), with an annual dividend of 72 cents, meaning the fourth dividend is expected to reach 42 cents, an increase of 16.7% year-on-year. Excluding the special dividend paid the previous year, the annual dividend increased by 9%. The market is focused on HSBC's management's forward guidance, including the resilience of net interest income from banking operations, the synergies after the privatization of Hang Seng, and the credit quality of commercial real estate.
Based on the annual forecast, brokers expect HSBC's pre-tax profit for the fourth quarter to be USD 5.756 billion, a surge of 1.5 times year-on-year; net profit is expected to soar 19.1 times to USD 3.954 billion. During the quarter, revenue is expected to rise by 33.6% to USD 15.448 billion, with anticipated credit losses decreasing by 25.1% to USD 1.020 billion. Brokers predict that HSBC's revenue last year increased by 2.3% year-on-year to USD 67.358 billion, with net interest income from banking operations slightly falling to USD 43.419 billion; expected credit losses are projected to widen by 16.3% to USD 3.969 billion; expenses are expected to increase by 10.2% to USD 36.419 billion; and annual net profit is expected to decline by 11.3% year-on-year to USD 20.337 billion.
HSBC's performance report for the first three quarters last year confirmed dilution and impairment losses related to its associate company, Bank of Communications, of USD 2.1 billion, and legal provisions of USD 1.4 billion, as well as restructuring and other related costs of USD 800 million associated with simplifying its organizational structure.
<h2>Wen Jie: The market is more focused on the fourth dividend</h2>
Wen Jie, a director of the Hong Kong Stock Analysts Association, believes the market is more focused on HSBC's fourth dividend, which, if the payout ratio remains at 50%, would be about 42 cents. The market is expected to pay attention to management's forward guidance, including whether there will be an increase in tangible shareholder return rates and the synergies from the privatization of Hang Seng. Goldman Sachs also indicated that investors' focus will be on HSBC's mid-term outlook, including the resilience of net interest income from banking operations and the growth of expenses and other income, with HSBC expected to continue its share buybacks. JPMorgan expects HSBC to repurchase USD 8 billion annually starting in 2027.
After the privatization of Hang Seng, HSBC emphasized that there are currently no plans for layoffs; however, JPMorgan believes there are long-term cost optimization opportunities, although significant cost savings are difficult to achieve in the short term. Barclays estimates that the privatization of Hang Seng could enhance HSBC's earnings per share by 4% to 7%. Goldman Sachs expects that the latest situation in Hong Kong's commercial real estate will continue to be a topic of discussion, but noted that HSBC's asset quality remains relatively stable. Wen Jie believes the worst situation has passed.
In the last three months, HSBC's stock price has risen by 28%, reaching a high of HKD 141.5. Wen Jie expects limited room for further increases. Analyst Nie Zhenbang from Huasheng Securities believes that if management releases an optimistic forward guidance, the stock price may challenge HKD 150. JPMorgan has raised HSBC's target price by nearly 20% to HKD 165

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HSBC HOLDINGS will announce its annual results this Wednesday, with a forecasted decline in pre-tax profit of 10.7% to USD 28.861 billion last year, and a full-year dividend of 72 cents. The market is focused on management's forward guidance, including net interest income from banking operations and the synergies after the privatization of Hang Seng. Brokers predict that pre-tax profit in the fourth quarter will surge 1.5 times, with revenue increasing by 33.6%. Analysts from Goldman Sachs and JP Morgan pointed out that investors will pay attention to HSBC's mid-term outlook and cost optimization opportunities

- HSBC Holdings (005) will release its annual results this Wednesday, with a forecasted 10.7% decline in pre-tax profit to $28.861 billion.  
- Analysts expect the fourth quarter's pre-tax profit to soar 150% year-on-year to $5.756 billion, driven by a 33.6% revenue rise.  
- Market focus will be on management's guidance regarding dividends, net interest income resilience, and synergies following the privatization of Hang Seng Bank, with potential earnings per share growth projected at 4% to 7%.

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HSBC Holdings will announce its performance on Wednesday. Brokers expect a 10% decrease in profit last year, and the market is focused on the forward guidance from senior management