JP Morgan has released a research report stating that Caixin has reported a case where a mainland resident was taxed on returns from offshore insurance policies. Although the report notes that enforcement is not yet nationwide and tax bureau implementations vary, the headline has sparked concerns about potential negative impacts on banks' insurance income.

The bank estimates that in the first half of 2026, Mainland Chinese Visitor (MCV) insurance income will account for approximately 1% of HSBC Holdings (00005) revenue and about 0.7% of Standard Chartered (02888) revenue. Even if the scope of enforcement expands, JP Morgan still believes that Hong Kong insurance products remain competitive compared to mainland alternatives. Therefore, the impact on the fundamental earnings of HSBC and Standard Chartered is expected to be limited, though the news may weigh on short-term sentiment and share prices.

The bank notes that any resulting weakness could present a buying opportunity, reaffirming its "Overweight" ratings on HSBC and Standard Chartered, with target prices of HKD 200 and HKD 310 respectively. JP Morgan prefers Standard Chartered due to its strong earnings per share growth, clearer return on equity expansion trajectory, and still reasonable valuation.