CICC has released a research report noting that BOC Hong Kong (02388) reported its 2025 annual results, with revenue increasing 8.1% year-on-year and net profit attributable to shareholders rising 4.9%. Revenue for the fourth quarter of last year grew 13.8% year-on-year, while pre-tax profit increased by 5%, with performance meeting CICC's expectations. The report introduces profit forecasts for the current and next fiscal years, projecting the company's operating revenue at HK$77.3 billion and HK$78.4 billion, and net profit attributable to shareholders at HK$40 billion and HK$40.5 billion, respectively. Considering changes in market risk appetite and earnings expectations, CICC has raised the target price by 53% to HK$45.1. This corresponds to price-to-book ratios of 1.3 times and 1.2 times for the current and next year, indicating an 11.2% upside potential. The "Outperform Industry" rating is maintained. CICC also forecasts that BOC Hong Kong's net fee income will maintain a double-digit year-on-year growth rate in 2026, with credit costs remaining largely flat at approximately 50 basis points. The company disclosed that its board has preliminarily approved a shareholder return framework for 2026 to 2028. Key measures include flexibly increasing the dividend payout ratio within the established range (40% to 60%), conducting share buybacks, and issuing special dividends to enhance shareholder returns, with implementation targeted for the first half of this year's results announcement. Given the company's current high valuation level, CICC assesses that dividend-related measures are more likely to be adopted, with special shareholder returns expected to materialize in the first half of this year.