HSBC Earnings: A Clear Beat Despite Messy One-Offs

We maintain our narrow moat rating on HSBC and keep our fair value estimate of GBX 800 for its London listing while our fair value estimate for its Hong Kong listing rises 2% to HKD 78.5 from HKD 77 and for its U.S. ADRs to USD 50 from USD 49. Our fair values represent a multiple to March 2023 book value of 1.09 times and imply 31%-33% upside. Assuming midcycle ROE of 12%, a fair price/book ratio of 1.09 times implies a fair price/earnings ratio of 9.1 times and a fair dividend yield of 5.5% assuming a 50% core payout ratio.