At HK$28.20, Is BOC Hong Kong (Holdings) Limited (HKG:2388) Worth Looking At Closely?

Let’s talk about the popular BOC Hong Kong (Holdings) Limited (HKG:2388). The company’s shares saw a double-digit share price rise of over 10% in the past couple of months on the SEHK. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine BOC Hong Kong (Holdings)’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for BOC Hong Kong (Holdings)

What’s the opportunity in BOC Hong Kong (Holdings)?

Good news, investors! BOC Hong Kong (Holdings) is still a bargain right now. According to my valuation, the intrinsic value for the stock is HK$36.81, but it is currently trading at HK$28.20 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, BOC Hong Kong (Holdings)’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of BOC Hong Kong (Holdings) look like?

SEHK:2388 Past and Future Earnings, January 16th 2020
SEHK:2388 Past and Future Earnings, January 16th 2020

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of BOC Hong Kong (Holdings), it is expected to deliver a relatively unexciting earnings growth of 3.6%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since 2388 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on 2388 for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 2388. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on BOC Hong Kong (Holdings). You can find everything you need to know about BOC Hong Kong (Holdings) in the latest infographic research report. If you are no longer interested in BOC Hong Kong (Holdings), you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.