Chairman Position Vacant, How Can Huishang Bank Outperform Its Peers?

Listing | Zhongfang.com

Review | Li Xiaoyan

In a market environment where the A-shares and Hong Kong stocks of banks are generally weakening, Huishang Bank (3698.HK) has stood out with an independent and strong performance, becoming the most eye-catching among the banking stocks in both markets. On March 9, the stock price surged by 8.53% in a single day, ranking first among A/H bank stocks in terms of daily increase; since 2026, it has risen by 27.19%, with nearly a 67.18% increase over the past year, and its market value has stabilized above HKD 56 billion. Even with the chairman position vacant for nearly 8 months, Huishang Bank has continued to achieve both stock price and performance growth through solid management, performance improvement, and asset quality enhancement, demonstrating the resilience of a mature city commercial bank through cycles.

This strong stock price surge is mainly driven by the significant catalyst of inclusion in the Hong Kong Stock Connect and solid fundamentals. On March 9, Huishang Bank was officially included in the Hong Kong Stock Connect, opening a channel for mainland funds to allocate, greatly increasing liquidity and market attention, which provided strong momentum for the stock price rise. The fundamental reason for the long-term strength of the stock price lies in the bank’s consistently improving operating performance. On March 6, Huishang Bank released its 2025 earnings forecast, projecting an annual operating income of RMB 37.67 billion, up 1.2% year-on-year; net profit of RMB 16.93 billion, up 6.3%, leading the industry in profit growth. By the end of 2025, the bank’s total assets exceeded RMB 2.3 trillion, a 15.5% increase year-on-year, with growth far surpassing the city commercial banks’ average of 13.7% and the banking industry’s 8.0%, maintaining a leading position in the industry.

Steady expansion of scale and continuous improvement in efficiency reflect Huishang Bank’s years of deep cultivation of its core business and prudent management. Over the past five years, the bank’s asset size has maintained double-digit rapid growth, rising from RMB 1.27 trillion at the end of 2020 to RMB 2.3 trillion now, an increase of over 80% in five years, achieving leapfrog development. Its business structure has been continuously optimized, with precise credit deployment. In the first half of 2025, the loan scale exceeded RMB 1 trillion, doubling since 2020, and financial services to the real economy have steadily improved. Facing the widespread pressure of declining net interest margins industry-wide, the bank actively optimized its income structure, focusing on non-interest income, achieving revenue growth against the trend, and maintaining steady profit growth, with operational quality steadily improving.

Asset quality continues to improve, and risk management is solid and effective, laying a secure foundation for the bank’s stable development. By the end of 2025, Huishang Bank’s non-performing loan ratio was 0.98%, down 1 basis point from the same period last year, maintaining a high-quality level below 1% for many years; its loan loss reserve coverage ratio remains high, with sufficient risk resistance capacity to effectively cope with various potential risks. Amid intensified industry competition and a complex external environment, the bank has always adhered to risk bottom lines, improved comprehensive risk control systems, accurately disposed of non-performing assets, and promoted scale expansion and risk prevention in tandem, providing a solid guarantee for steady performance growth.

Especially noteworthy is that during the special transition period when the chairman position was vacant and the president was acting as the CEO, Huishang Bank maintained orderly operations, with firm strategic execution and steady progress across all business areas, without any impact on development pace due to management changes. Behind this is the bank’s mature corporate governance structure,完善的 internal control mechanisms, and a professional management team, reflecting the maturity of corporate governance and operational stability. The management team diligently fulfills their responsibilities, focusing on core businesses, coordinating business development, risk control, and reform and innovation, ensuring stable and quality growth of the bank’s operations, and responding to market expectations with impressive results.

Currently, Huishang Bank’s development momentum continues to build, with long-term growth potential broadening. As a leading regional city commercial bank, it is based in Anhui and radiates to the Yangtze River Delta, leveraging regional economic development advantages, deepening local markets, and focusing on key areas such as inclusive finance, green finance, and technological innovation finance, continuously strengthening its business foundation. After being included in the Hong Kong Stock Connect, the bank’s valuation repair space has further opened, with ongoing increases in market attention and development vitality. Meanwhile, the bank is steadily advancing preparations for returning to A-share listing, addressing issues such as governance optimization and shareholding regulation, accelerating board turnover, improving governance structures, and actively rectifying and upgrading, clearing obstacles for long-term healthy development.

Objectively, Huishang Bank still has some areas for improvement. Due to industry environment impacts, revenue growth is slightly below market expectations, and non-interest income needs further enhancement; dividend payout levels have been relatively low for a long time, leading to some disagreements with shareholders; corporate governance and shareholding structures still require ongoing optimization. These are challenges the bank needs to address to achieve higher-quality development. However, the bank recognizes these issues, actively rectifies them, and steadily promotes various optimization efforts, demonstrating a pragmatic and progressive development attitude.

The time is ripe for bold progress, and a new journey begins with perseverance. Currently, the banking industry is entering a new stage of quality improvement and efficiency enhancement. Huishang Bank’s resilience and development strength during the transition period have gained market recognition. In the future, with the arrival of a new chairman, continuous improvement of governance, ongoing optimization of business structure, steady enhancement of asset quality, and the opportunities brought by the Hong Kong Stock Connect, the bank will further unleash its development potential and consolidate its industry advantages. Based on a solid foundation of prudent management, maintaining its original intention to serve the real economy, Huishang Bank is expected to continue leading among peers, demonstrating greater value in the capital market, and achieving dual improvements in operational performance and market reputation.