[ET Net News Agency, 21 November 2019] UBS Global Research reiterated that a meaningful
restructuring of HSBC Holdings' (00005) GB&M division, French and US retail looks likely.
The research house expects higher restructuring charges in 4Q 2019-2021 and significant
goodwill write-offs. But success could improve the group ROTE (return on tangible equity)
by 1-1.5% and return 4% of the market cap to shareholders.
UBS said its survey responses gathered in early November having 71% of respondents
bearish, 29% neutral and none bullish, but the valuation at this stage does not
incorporate an obvious uncertainty discount for restructuring, lower rates and Hong Kong
disruption in particular.
UBS sees downside near term EPS forecast risk - the bigger the restructuring the more
significant the near term EPS drag. Whilst it sees restructuring as the right reaction to
a more challenging income and capital generation environment, UBS sees no obvious
uncertainty discount. It rates HSBC "neutral", with an unchanged target price of 575p, or
HK$58.2. (KL)
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00005 HSBC HOLDINGS
Nominal 
64.250 +0.850 (+1.341%) Others
21/11/2019 15:46
{I-bank focus}Investors net bearish on HSBC; valuation not
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