Shares of Bank of East Asia (00023) continued their upward momentum following strong earnings results, climbing more than 5% again during the morning session on Tuesday. At the time of writing, the stock had advanced 5.14% to HK$18.40, with trading turnover reaching HK$57.83 million.

The lender recently reported its interim financial results, posting interest income of HK$15.506 billion, down 8.23% year-on-year. Net profit attributable to shareholders rose 0.37% to HK$2.416 billion, with basic earnings per share of HK$0.91. The company declared an interim dividend of HK$0.46 per share, lifting its payout ratio to 50% from 45% in the same period last year.

In a research report, HSBC highlighted that Bank of East Asia aims to double its dividend per share by 2028 compared to 2025 levels. Based on the current share price, the projected dividend yield for 2026 to 2028 is estimated at approximately 5% to 8%. The bank also noted that southbound shareholding in the stock has risen significantly recently, increasing from 0.18% at the end of July to 0.56%, with expectations that the high dividend yield will attract southbound investors.

HSBC has raised its earnings forecasts for Bank of East Asia for 2026, 2027, and 2028 by 11.6%, 12.9%, and 4.8%, respectively, reflecting higher fee income, better trading gains, and lower operating expenses. The target price has been lifted from HK$14.80 to HK$21.50, with the rating upgraded from "Hold" to "Buy".