【2388 Major Bank Report】Bank of China Hong Kong rises over 5%; Morgan Stanley: Slightly raise target price to HKD 39.9, continue to recommend reducing holdings

BOC Hong Kong (02388) Announced its full-year 2025 results, with a final dividend of HK$1.255. Morgan Stanley issued a report, raising its target price for BOC Hong Kong from HK$39.7 by 0.5% to HK$39.9, and maintaining its rating of “Underperform”.

After results were released, BOC Hong Kong shares rose on Tuesday (the 31st) by 5.7%, hitting a high of HK$42.84, and closed at HK$42.8, still up 5.6% for the day, with total trading turnover of HK$920 million.

Morgan Stanley said the amount of the final dividend was higher than the firm and the market’s general expectations, while the Common Equity Tier 1 (CET1) capital adequacy ratio was 24%. The board has approved the shareholder return plan for 2026-2028, and details will be announced when interim results are released.

Morgan Stanley believes the capital return plan, along with its relatively defensive positioning as a Hong Kong local enterprise, may support the absolute level of BOC Hong Kong’s share price. “We believe there is more upside room for the Group’s other stocks, even though BOC Hong Kong may perform well in an environment where hedging sentiment has warmed.”

Morgan Stanley said BOC Hong Kong’s latest performance is a mixed bag. Net interest margin delivered strong performance quarter-on-quarter. On the other hand, fee income was below expectations, and the exposure to commercial real estate led to expected credit losses that were higher. Morgan Stanley expects BOC Hong Kong’s 2026 revenue growth to face headwinds, limiting the upside for the share price, but the capital return plan is expected to provide support. As it believes there is greater absolute growth potential in other areas of the Bank of China Group, it maintains its Underperform rating on BOC Hong Kong.

			

			

	


		Buy on opening—chase the rally and sell on strength
	





	Profit declines for the first time in four years—can BYD’s “King of the Car World” status be maintained? Will “Token First Stock” Qianxu’s results hit a turning point?