Investment suggestion: Mainly considering the higher-than-expected interest rate hike and the better-than-expected net charge of impairment allowances, we have revised up our earnings forecasts for 2022-2024. We forecast EPS for FY22/ FY23/ FY24 to grow YoY by 21.5%/ 22.2%/ 13.2% to HK$2.639/ HK$3.223/ HK$3.648, respectively. We maintain our target price of HK$37.65, equivalent to 1.2x FY22 PBR, and maintain our rating of "Buy" for the Company.
　　The YoY growth in operating profit excluding impairment allowances beat expectations in 3Q22. In 3Q22, net interest income grew by 40.0% YoY or 13.7% QoQ, mainly attributable to the significant improvement of NIM given interest rate hike. In 3Q22, the Company recorded a net reversal of impairment allowances of HK$17 mn. Based on our calculations, the Company’s operating profit excluding impairment allowances will increase 21.4% YoY. In the near future, we expect the Company’s YoY increase in net interest income to further accelerate given the expected higher NIM expansion contributed by the significant interest rate hike. Given that the Company’s asset quality is expected to remain relatively stable, we expect that net charge of impairment allowances will remain at a moderate level.
　　Catalysts: NIM expected to further improve given the Fed’s interest rate hike.
　　Risk factors: Global economic conditions may not be in line with our expectations; resurgences in Covid-19 pandemic.