DB:HSB

Stock Analysis Report

Hang Seng Bank

Executive Summary

Hang Seng Bank Limited, together with its subsidiaries, provides various banking and related financial services to individual, corporate, commercial, small and medium-sized enterprise, and institutional customers in Hong Kong, Mainland China, and internationally.


Snowflake Analysis

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-0.5%

HSB

-0.3%

DE Banks

-0.9%

DE Market


1 Year Return

-9.9%

HSB

0.9%

DE Banks

12.8%

DE Market

Return vs Industry: HSB underperformed the German Banks industry which returned 0.9% over the past year.

Return vs Market: HSB underperformed the German Market which returned 12.8% over the past year.


Shareholder returns

HSBIndustryMarket
7 Day-0.5%-0.3%-0.9%
30 Day2.1%17.1%-0.4%
90 Day0%19.3%2.3%
1 Year-5.9%-9.9%4.2%0.9%16.3%12.8%
3 Year11.4%-0.9%-2.5%-7.4%15.8%5.7%
5 Year44.3%18.2%-3.9%-27.8%19.7%3.3%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

41.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HSB (€19.1) is trading below our estimate of fair value (€32.61)

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


Price To Earnings Ratio

PE vs Industry: HSB is good value based on its PE Ratio (12.8x) compared to the Banks industry average (17.7x).

PE vs Market: HSB is good value based on its PE Ratio (12.8x) compared to the German market (21x).


Price to Earnings Growth Ratio

PEG Ratio: HSB is poor value based on its PEG Ratio (11.2x)


Price to Book Ratio

PB vs Industry: HSB is overvalued based on its PB Ratio (1.7x) compared to the DE Banks industry average (0.9x).


Next Steps

Future Growth

How is Hang Seng Bank forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

1.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HSB's forecast earnings growth (1.1% per year) is above the savings rate (-0.4%).

Earnings vs Market: HSB's earnings (1.1% per year) are forecast to grow slower than the German market (13% per year).

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

Revenue vs Market: HSB's revenue (7.9% per year) is forecast to grow faster than the German market (5.2% per year).

High Growth Revenue: HSB's revenue (7.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HSB's Return on Equity is forecast to be low in 3 years time (13.3%).


Next Steps

Past Performance

How has Hang Seng Bank performed over the past 5 years?

3.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HSB has high quality earnings.

Growing Profit Margin: HSB's current net profit margins (65.8%) are higher than last year (61.4%).


Past Earnings Growth Analysis

Earnings Trend: HSB's earnings have grown by 3.3% per year over the past 5 years.

Accelerating Growth: HSB's earnings growth over the past year (2.3%) is below its 5-year average (3.3% per year).

Earnings vs Industry: HSB earnings growth over the past year (2.3%) exceeded the Banks industry -7%.


Return on Equity

High ROE: HSB's Return on Equity (13.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Hang Seng 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

Inventory Level: HSB has a low level of unsold assets or inventory.

Debt Coverage by Assets: HSB's debt is covered by short term assets (assets are 5.7x debt).


Financial Institutions Analysis

Asset Level: HSB's level of assets compared to its equity is low.

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

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

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

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

Level of Bad Loans: HSB has an appropriate level of bad loans (0.22%)


Next Steps

Dividend

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

5.02%

Current Dividend Yield


Upcoming Dividend Payment

TodayFeb 24 2020Ex Dividend DateMar 03 2020Dividend Pay DateMar 20 202017 days from Ex DividendBuy in the next 7 days to receive upcoming dividend

Dividend Yield vs Market

Notable Dividend: HSB's dividend (5.02%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: HSB's dividend (5.02%) is in the top 25% of dividend payers in the German market (3.63%)


Stability and Growth of Payments

Stable Dividend: HSB's dividend payments have been volatile in the past 10 years.

Growing Dividend: HSB's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (64.2%), HSB's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HSB's dividends in 3 years are forecast to be covered by earnings (66.8% payout ratio).


Next Steps

Management

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

3.6yrs

Average management tenure


CEO

Louisa Cheang (55yo)

2.6yrs

Tenure

HK$12,031,774

Compensation

Ms. Wai Wan Cheang, also known as Louisa, serves as Independent Non-Executive Director at Treasury Wine Estates Limited since December 1, 2018. She serves as the Chairman of various subsidiaries in Hang Se ...


CEO Compensation Analysis

Compensation vs Market: Louisa's total compensation ($USD1.54M) is below average for companies of similar size in the German market ($USD4.38M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Wai Wan Cheang
Vice-Chairman & Chief Executive2.6yrsHK$12.03mno data
Wing Han Kwan
Head of Retail Banking & Wealth Management and Executive Director2.8yrsHK$3.93mno data
Wing Lok Leung
Chief Financial Officer0yrsno datano data
L. C. Chan
Chief Operating Officer3.9yrsno datano data
Chi Chung Li
Company Secretary & General Counsel2.1yrsno datano data
May Kay Wong
Head of Communications & Corporate Sustainability1.1yrsno datano data
Yee Ning Wang
Head of Human Resources3.7yrsno datano data
Yin Lam
Head of Commercial Banking0yrsno datano data
Shuk Pui Chan
Head of Business Development5.6yrsno datano data
Kay Chun Yip
Head of Regulatory Compliance4.3yrsno datano data

3.6yrs

Average Tenure

56yo

Average Age

Experienced Management: HSB's management team is considered experienced (3.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Wai Wan Cheang
Vice-Chairman & Chief Executive2.6yrsHK$12.03mno data
Wing Han Kwan
Head of Retail Banking & Wealth Management and Executive Director2.8yrsHK$3.93mno data
Yue Song
Vice-Chairman & CEO of Hang Seng Bank (China) Limited2.1yrsno datano data
Kuo Fung Ch'ien
Independent Non-Executive Chairman13.1yrsHK$800.00kno data
Yun-Lien Lee
Independent Non-Executive Director5.8yrsHK$920.00kno data
Cho Chak Chan
Independent Non-Executive Director24.5yrsHK$650.00k0.000050% HK$18.4k
Hong Sui Lo
Non-Executive Director21yrsHK$500.00kno data
Ka-Cheung Li
Independent Non-Executive Director20yrsHK$920.00kno data
Tung Shun Wong
Non-Executive Director14.8yrsHK$560.00kno data
Lik Sang Chan
Non-Executive Director6.1yrsHK$500.00kno data

9.6yrs

Average Tenure

66yo

Average Age

Experienced Board: HSB's board of directors are considered experienced (9.6 years average tenure).


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

Hang Seng Bank Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Hang Seng Bank Limited
  • Ticker: HSB
  • Exchange: DB
  • Founded: 1933
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: HK$312.013b
  • Listing Market Cap: HK$36.884b
  • Shares outstanding: 1.91b
  • Website: https://www.hangseng.com

Number of Employees


Location

  • Hang Seng Bank Limited
  • 83 Des Voeux Road
  • Central
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HSNG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
HSBDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
11SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 1992
11SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992
11SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992
HSNG.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDOct 1992

Biography

Hang Seng Bank Limited, together with its subsidiaries, provides various banking and related financial services to individual, corporate, commercial, small and medium-sized enterprise, and institutional customers in Hong Kong, Mainland China, and internationally. It operates through four segments: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Other. The company offers personal banking services, including current and savings accounts, mortgages and personal loans, credit cards, and insurance and wealth management services, as well as consumer lending services. It also provides corporate lending, trade and receivable finance, payments and cash management, treasury and foreign exchange, general insurance, key-person insurance, investment, and corporate wealth management services, as well as general banking, interest rate, money market, structured, derivative products, etc. In addition, the company offers trustee, nominee, retirement benefit and life assurance, fund management, stock broking, and property management services, as well as index compilation and licensing; fund raising and sales; and asset management services. It operates approximately 280 service outlets in Hong Kong; branches in Macau and Singapore; and a representative office in Taipei. Hang Seng Bank Limited, through its subsidiary, Hang Seng Bank (China) Limited, operates a mainland China network with outlets in the Pearl River delta, the Yangtze River delta, the Bohai Rim region, and Midwest China. The company was founded in 1933 and is headquartered in Central, Hong Kong. Hang Seng Bank Limited is a subsidiary of The Hongkong and Shanghai Banking Corporation Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 20:36
End of Day Share Price2020/02/21 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.