DB:HB8

Stock Analysis Report

Huishang Bank

Executive Summary

Huishang Bank Corporation Limited, together with its subsidiaries, provides various commercial banking products and services in the People’s Republic of China.


Snowflake Analysis

Very undervalued with flawless balance sheet and pays a dividend.

Share Price & News

How has Huishang Bank's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HB8 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

7.7%

HB8

3.2%

DE Banks

4.3%

DE Market


1 Year Return

-10.2%

HB8

-37.3%

DE Banks

-14.2%

DE Market

Return vs Industry: HB8 exceeded the German Banks industry which returned -39% over the past year.

Return vs Market: HB8 exceeded the German Market which returned -16.6% over the past year.


Shareholder returns

HB8IndustryMarket
7 Day7.7%3.2%4.3%
30 Day5.7%-12.8%-9.0%
90 Day3.1%-27.8%-21.6%
1 Year-8.3%-10.2%-35.3%-37.3%-11.7%-14.2%
3 Year-11.9%-16.0%-40.6%-43.5%-12.3%-19.6%
5 Year-7.9%-20.9%-41.3%-53.0%-14.0%-25.6%

Price Volatility Vs. Market

How volatile is Huishang Bank's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Huishang Bank undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HB8 (€0.34) is trading below our estimate of fair value (€1.02)

Significantly Below Fair Value: HB8 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HB8 is good value based on its PE Ratio (3.4x) compared to the Banks industry average (15.2x).

PE vs Market: HB8 is good value based on its PE Ratio (3.4x) compared to the German market (16.8x).


Price to Earnings Growth Ratio

PEG Ratio: HB8 is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: HB8 is good value based on its PB Ratio (0.4x) compared to the DE Banks industry average (0.8x).


Next Steps

Future Growth

How is Huishang Bank forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

9.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HB8's forecast earnings growth (9.5% per year) is above the savings rate (-0.4%).

Earnings vs Market: HB8's earnings (9.5% per year) are forecast to grow slower than the German market (14% per year).

High Growth Earnings: HB8's earnings are forecast to grow, but not significantly.

Revenue vs Market: HB8's revenue (23.3% per year) is forecast to grow faster than the German market (3.9% per year).

High Growth Revenue: HB8's revenue (23.3% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HB8's Return on Equity is forecast to be low in 3 years time (12.8%).


Next Steps

Past Performance

How has Huishang Bank performed over the past 5 years?

10.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HB8 has high quality earnings.

Growing Profit Margin: HB8's current net profit margins (49.1%) are lower than last year (49.6%).


Past Earnings Growth Analysis

Earnings Trend: HB8's earnings have grown by 10.2% per year over the past 5 years.

Accelerating Growth: HB8's earnings growth over the past year (12.8%) exceeds its 5-year average (10.2% per year).

Earnings vs Industry: HB8 earnings growth over the past year (12.8%) exceeded the Banks industry 0.7%.


Return on Equity

High ROE: HB8's Return on Equity (11.2%) is considered low.


Next Steps

Financial Health

How is Huishang Bank's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: HB8's level of assets compared to its equity is moderate.

Allowance for Bad Loans: HB8 has a sufficient allowance for bad loans.

Low Risk Liabilities: HB8's liabilities are made up of primarily low risk sources of funding.

Loan Level: HB8 has an acceptable proportion of non-loan assets held.

Low Risk Deposits: HB8's loans are broadly funded by customer deposits.

Level of Bad Loans: HB8 has an appropriate level of bad loans (0.94%)


Next Steps

Dividend

What is Huishang Bank's current dividend yield, its reliability and sustainability?

5.92%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: HB8's dividend (5.92%) is higher than the bottom 25% of dividend payers in the German market (1.67%).

High Dividend: HB8's dividend (5.92%) is in the top 25% of dividend payers in the German market (4.71%)


Stability and Growth of Payments

Stable Dividend: HB8 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: HB8's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (20.2%), HB8's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HB8's dividends in 3 years are forecast to be thoroughly covered by earnings (8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.7yrs

Average management tenure


CEO

Renfu Zhang (57yo)

1.67s

Tenure

CN¥692,000

Compensation

Mr. Renfu Zhang has been President of Huishang Bank Corporation Ltd. since August 23, 2018 and it's Executive Director since December 28, 2018. He had served as Executive Officer of Huishang Bank Corporati ...


CEO Compensation Analysis

Compensation vs Market: Renfu's total compensation ($USD97.57K) is below average for companies of similar size in the German market ($USD3.30M).

Compensation vs Earnings: Renfu's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Xuemin Wu
Executive Chairman2.33yrsCN¥703.00kno data
Renfu Zhang
President & Executive Director1.67yrsCN¥692.00kno data
Dawei Li
GM of Financial Accounting Department & Financial Controllerno datano datano data
Tong Zhou
GM of Compliance Department and Director of Compliance & Risk Managementno dataCN¥325.00k0.0015% CN¥63.9k
Chuan Tang
GM of HR Department2.08yrsno data0.00046% CN¥19.3k
Guangcheng Gao
Executive Vice President1.25yrsCN¥562.99kno data
Min Xia
Head of Financial Deptno dataCN¥1.67mno data
Jiehua He
Executive Director0.67yrno datano data
Wai Fung Ngai
Joint Company Secretary6.75yrsno datano data
Baohua Lian
GM of Research & Development Department and Secretary to the Board1.67yrsno datano data

1.7yrs

Average Tenure

54.5yo

Average Age

Experienced Management: HB8's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Xuemin Wu
Executive Chairman2.33yrsCN¥703.00kno data
Renfu Zhang
President & Executive Director1.67yrsCN¥692.00kno data
Chuan Tang
GM of HR Department2.08yrsno data0.00046% CN¥19.3k
Jiehua He
Executive Director0.67yrno datano data
Yang Gao
Non-Executive Director10.33yrsno datano data
Zhou Yana
Independent Non-Executive Director1.67yrsCN¥100.00kno data
Tian Wu
Non-Executive Director1.33yrsno datano data
Youqi Zhang
Chairman of the Board of Supervisors1.75yrsCN¥1.32m0.00021% CN¥8.8k
Peikun Dai
Independent Non-Executive Director1.33yrsno datano data
Xiaolin Dong
External Supervisor1.42yrsno datano data

1.5yrs

Average Tenure

55.5yo

Average Age

Experienced Board: HB8's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Huishang Bank Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Huishang Bank Corporation Limited
  • Ticker: HB8
  • Exchange: DB
  • Founded: 1997
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: HK$35.249b
  • Listing Market Cap: HK$4.205b
  • Shares outstanding: 12.15b
  • Website: https://www.hsbank.com.cn

Number of Employees


Location

  • Huishang Bank Corporation Limited
  • Tianhui Building
  • Block A
  • Hefei
  • Anhui Province
  • 230001
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
3698SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDNov 2013
HB8DB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURNov 2013
A1882LDB (Deutsche Boerse AG)5.5%-IDX/LKD SNR NTS PERP USD200000'REGSDEEURJan 2017

Biography

Huishang Bank Corporation Limited, together with its subsidiaries, provides various commercial banking products and services in the People’s Republic of China. It operates through four segments: Corporate Banking, Retail Banking, Treasury, and Others. The company provides current accounts, deposits, overdrafts, loans, trade related products and other credit facilities, foreign currency, and wealth management products to corporate customers, government authorities, and financial institutions. It also offers savings deposits, personal loans and advances, credit and debit cards, payments and settlements, wealth management products and funds, and insurance agency services to retail customers. In addition, the company conducts securities investment, money market, and repurchases transactions; and provides online and mobile banking services. Further, it provides Renminbi and foreign currency deposits; and clearing and settlement, assets custody, and finance leasing services. As of December 31, 2018, it had 17 branches; 424 front offices, which included 2 business department branches and 422 sub-branches; 661 self-service areas; and 2,074 cash self-service equipment, such as 305 ATMs, 1,067 CRSs, 373 self-service terminals, and 329 smart self-service terminals. The company was formerly known as Hefei City United Bank and changed its name to Huishang Bank Corporation Limited. The company was founded in 1997 and is headquartered in Hefei, China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/07 22:10
End of Day Share Price2020/04/07 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.