Recent weakness in HSBC Holdings PLC (LSE:HSBA)’s share price is a buying opportunity, according to Jefferies.
The bank said investor meetings with HSBC's Asia CFO Ming Lau at the Jefferies Asia forum in Hong Kong conveyed a message of consistency around delivery on the "greater than $35 billion" of net interest income for this year guided at the second quarter results.
On Chinese commercial real estate, HSBC's Asia CFO reiterated that the downside risk is quantified at $1 billion of further credit costs, with $300 million taken in the second quarter, with the downside seen as 'plausible' and baked into the 40bps 20223 cost of risk guidance, Jefferies explained.
“We noted conservatism around HK CRE risk, consistent with other banks though for HSBC likely an asset growth story at this stage,” the broker added.
Jefferies has a buy rating on HSBC with a 1,000p price target.