China Zheshang Bank Co., Ltd

SEHK:2016 Stock Report

Market Cap: HK$79.6b

China Zheshang Bank Valuation

Is 2016 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of 2016 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 2016 (HK$2.16) is trading below our estimate of fair value (HK$8.44)

Significantly Below Fair Value: 2016 is trading below fair value by more than 20%.


Key Valuation Metric

Which metric is best to use when looking at relative valuation for 2016?

Other financial metrics that can be useful for relative valuation.

2016 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenuen/a
Enterprise Value/EBITDAn/a
PEG Ratio0.4x

Price to Earnings Ratio vs Peers

How does 2016's PE Ratio compare to its peers?

The above table shows the PE ratio for 2016 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average7.5x
11 Hang Seng Bank
10.4x1.7%HK$181.3b
2388 BOC Hong Kong (Holdings)
7.5x1.1%HK$268.0b
23 Bank of East Asia
8.5x13.9%HK$25.6b
998 China CITIC Bank
3.8x8.1%HK$349.0b
2016 China Zheshang Bank
3.8x10.3%HK$79.6b

Price-To-Earnings vs Peers: 2016 is good value based on its Price-To-Earnings Ratio (3.8x) compared to the peer average (7.5x).


Price to Earnings Ratio vs Industry

How does 2016's PE Ratio compare vs other companies in the HK Banks Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a4.9%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a4.9%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: 2016 is good value based on its Price-To-Earnings Ratio (3.8x) compared to the Hong Kong Banks industry average (4.9x).


Price to Earnings Ratio vs Fair Ratio

What is 2016's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

2016 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio3.8x
Fair PE Ratio4.7x

Price-To-Earnings vs Fair Ratio: 2016 is good value based on its Price-To-Earnings Ratio (3.8x) compared to the estimated Fair Price-To-Earnings Ratio (4.7x).


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst 2016 forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentHK$2.16
HK$2.70
+24.8%
2.8%HK$2.77HK$2.62n/a2
Oct ’25HK$2.20
HK$2.70
+22.6%
2.8%HK$2.77HK$2.62n/a2
Sep ’25HK$2.06
HK$2.70
+30.9%
2.8%HK$2.77HK$2.62n/a2
Aug ’25HK$2.14
HK$2.91
+36.2%
5.0%HK$3.06HK$2.77n/a2
Jul ’25HK$2.09
HK$2.91
+39.5%
5.0%HK$3.06HK$2.77n/a2
Jun ’25HK$2.26
HK$2.91
+29.0%
5.0%HK$3.06HK$2.77n/a2
May ’25HK$2.26
HK$2.92
+29.0%
5.0%HK$3.06HK$2.77n/a2
Apr ’25HK$2.29
HK$2.92
+27.5%
5.1%HK$3.07HK$2.77n/a2
Mar ’25HK$2.17
HK$2.75
+26.5%
3.8%HK$2.85HK$2.64n/a2
Feb ’25HK$2.08
HK$2.75
+32.0%
3.8%HK$2.85HK$2.64n/a2
Jan ’25HK$2.02
HK$2.74
+35.5%
2.6%HK$2.81HK$2.67n/a2
Dec ’24HK$2.08
HK$2.74
+31.6%
2.6%HK$2.81HK$2.67n/a2
Nov ’24HK$1.95
HK$2.73
+40.2%
2.8%HK$2.81HK$2.66n/a2
Oct ’24HK$2.05
HK$2.93
+43.0%
0.3%HK$2.94HK$2.92HK$2.202
Sep ’24HK$2.14
HK$2.94
+37.6%
0.5%HK$2.96HK$2.93HK$2.062
Aug ’24HK$2.25
HK$3.61
+60.3%
1.3%HK$3.66HK$3.56HK$2.142
Jul ’24HK$2.57
HK$3.69
+43.5%
3.5%HK$3.82HK$3.56HK$2.092
Jun ’24HK$2.63
HK$3.69
+40.2%
3.5%HK$3.82HK$3.56HK$2.262
May ’24HK$2.81
HK$3.69
+31.2%
3.5%HK$3.82HK$3.56HK$2.262
Apr ’24HK$2.68
HK$3.70
+38.0%
3.8%HK$3.84HK$3.56HK$2.292

Analyst Forecast: Target price is more than 20% higher than the current share price, but there are not enough analysts covering the stock to determine statistical confidence in agreement.


Discover undervalued companies