SEHK:2388

Stock Analysis Report

BOC Hong Kong (Holdings)

Executive Summary

BOC Hong Kong (Holdings) Limited, an investment holding company, provides banking and related financial services to corporate and individual customers in Hong Kong, Mainland China, and internationally.


Snowflake Analysis

Flawless balance sheet average dividend payer.

Share Price & News

How has BOC Hong Kong (Holdings)'s share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 2388 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.4%

2388

-2.4%

HK Banks

-3.2%

HK Market


1 Year Return

-17.1%

2388

-15.1%

HK Banks

-10.2%

HK Market

Return vs Industry: 2388 underperformed the Hong Kong Banks industry which returned -11.7% over the past year.

Return vs Market: 2388 underperformed the Hong Kong Market which returned -7.6% over the past year.


Shareholder returns

2388IndustryMarket
7 Day-2.4%-2.4%-3.2%
30 Day-1.3%-2.6%-3.3%
90 Day-0.4%-3.5%0.2%
1 Year-13.0%-17.1%-10.6%-15.1%-6.9%-10.2%
3 Year-1.2%-12.1%6.4%-8.3%11.7%0.4%
5 Year24.5%-0.9%12.3%-13.9%11.1%-7.3%

Price Volatility Vs. Market

How volatile is BOC Hong Kong (Holdings)'s share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is BOC Hong Kong (Holdings) undervalued compared to its fair value and its price relative to the market?

28.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 2388 (HK$27) is trading below our estimate of fair value (HK$37.73)

Significantly Below Fair Value: 2388 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2388 is poor value based on its PE Ratio (8.8x) compared to the Banks industry average (5.7x).

PE vs Market: 2388 is good value based on its PE Ratio (8.8x) compared to the Hong Kong market (10.1x).


Price to Earnings Growth Ratio

PEG Ratio: 2388 is poor value based on its PEG Ratio (4.8x)


Price to Book Ratio

PB vs Industry: 2388 is overvalued based on its PB Ratio (1x) compared to the HK Banks industry average (0.5x).


Next Steps

Future Growth

How is BOC Hong Kong (Holdings) forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

1.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2388's forecast earnings growth (1.8% per year) is above the savings rate (1.6%).

Earnings vs Market: 2388's earnings (1.8% per year) are forecast to grow slower than the Hong Kong market (11.8% per year).

High Growth Earnings: 2388's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2388's revenue (3.9% per year) is forecast to grow slower than the Hong Kong market (9.6% per year).

High Growth Revenue: 2388's revenue (3.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2388's Return on Equity is forecast to be low in 3 years time (11%).


Next Steps

Past Performance

How has BOC Hong Kong (Holdings) performed over the past 5 years?

8.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2388 has high quality earnings.

Growing Profit Margin: 2388's current net profit margins (59.7%) are lower than last year (60.4%).


Past Earnings Growth Analysis

Earnings Trend: 2388's earnings have grown by 8.8% per year over the past 5 years.

Accelerating Growth: 2388's earnings growth over the past year (3.7%) is below its 5-year average (8.8% per year).

Earnings vs Industry: 2388 earnings growth over the past year (3.7%) exceeded the Banks industry 3.6%.


Return on Equity

High ROE: 2388's Return on Equity (11.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is BOC Hong Kong (Holdings)'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: 2388 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 2388's debt is covered by short term assets (assets are 11.8x debt).


Financial Institutions Analysis

Asset Level: 2388's level of assets compared to its equity is moderate.

Allowance for Bad Loans: 2388 has a sufficient allowance for bad loans.

Low Risk Liabilities: 2388's liabilities are made up of primarily low risk sources of funding.

Loan Level: 2388 has an acceptable proportion of non-loan assets held.

Low Risk Deposits: 2388's loans are broadly funded by customer deposits.

Level of Bad Loans: 2388 has an appropriate level of bad loans (0.19%)


Next Steps

Dividend

What is BOC Hong Kong (Holdings)'s current dividend yield, its reliability and sustainability?

5.44%

Current Dividend Yield


Dividend Yield vs Market

company5.4%marketbottom25%2.3%markettop25%6.4%industryaverage5.5%forecastin3Years5.8%

Current dividend yield vs market & industry

Notable Dividend: 2388's dividend (5.44%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.29%).

High Dividend: 2388's dividend (5.44%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.34%).


Stability and Growth of Payments

Stable Dividend: 2388's dividend payments have been volatile in the past 10 years.

Growing Dividend: 2388's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (47.9%), 2388's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2388's dividends in 3 years are forecast to be well covered by earnings (48.7% payout ratio).


Next Steps

Management

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

3.3yrs

Average management tenure


CEO

Yingxin Gao (57yo)

2.1yrs

Tenure

HK$10,548,000

Compensation

Mr. Yingxin Gao has been Executive Director, Vice Chairman and Chief Executive of Bank of China (Hong Kong) Limited and BOC Hong Kong (Holdings) Ltd. since January 1, 2018. Mr. Gao was a Non-executive Dire ...


CEO Compensation Analysis

Compensation vs Market: Yingxin's total compensation ($USD1.35M) is about average for companies of similar size in the Hong Kong market ($USD1.05M).

Compensation vs Earnings: Yingxin's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Yingxin Gao
Vice Chairman & Chief Executive2.1yrsHK$10.55mno data
Yang Sui
Chief Financial Officer5.5yrsno datano data
Xiangqun Zhong
Chief Operating Officer4.4yrsno datano data
Qi Wang
Deputy Chief Executive of Legal & Compliance0yrsno datano data
Chengwen Zhuo
Chief Risk Officer0.3yrsno datano data
Yeung Yun Chi Kung
Deputy Chief Executive8.8yrsno datano data
Shu Yuan
Deputy Chief Executive of Financial Markets4.3yrsno datano data
Bing Wang
Deputy Chief Executive1.2yrsno datano data
Zhikun Qiu
Deputy Chief Executive1.1yrsno datano data
Nan Luo
Company Secretary3.3yrsno datano data

3.3yrs

Average Tenure

49yo

Average Age

Experienced Management: 2388's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Yingxin Gao
Vice Chairman & Chief Executive2.1yrsHK$10.55mno data
Wai-Hok Tung
Independent Non-Executive Director14.2yrsHK$692.00k0.00038% HK$1.1m
Beng Seng Koh
Independent Non-Executive Director13.9yrsHK$642.00kno data
Koon Shum Choi
Independent Non-Executive Director3.7yrsHK$592.00kno data
Liange Liu
Non-Executive Chairman0.6yrsno datano data
Yee Kwan Law
Independent Non-executive Director0.9yrsno datano data
Eva Cheng
Independent Non-Executive Director5.3yrsHK$500.00kno data
Jingzhen Lin
Non Executive Director1.5yrsno datano data

2.9yrs

Average Tenure

60yo

Average Age

Experienced Board: 2388's board of directors are not considered experienced ( 2.9 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

BOC Hong Kong (Holdings) Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: BOC Hong Kong (Holdings) Limited
  • Ticker: 2388
  • Exchange: SEHK
  • Founded: 1917
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: HK$285.465b
  • Shares outstanding: 10.57b
  • Website: https://www.bochk.com

Number of Employees


Location

  • BOC Hong Kong (Holdings) Limited
  • Bank of China Tower
  • 24th Floor
  • Central
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BNKH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2002
2388SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJul 2002
BOFDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2002
2388SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJul 2002
2388SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJul 2002
BHKL.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDApr 2003

Biography

BOC Hong Kong (Holdings) Limited, an investment holding company, provides banking and related financial services to corporate and individual customers in Hong Kong, Mainland China, and internationally. It operates through four segments: Personal Banking, Corporate Banking, Treasury, and Insurance. The company offers savings, current, and time deposit accounts; mortgage plans; overdrafts; personal loans; personal life, medical and accident, travel and leisure, business protection, home, domestic helper, motor, and golfer insurance products; wealth management services; and Internet, phone, and mobile banking services. It also provides cross-border services for corporate customers; business banking, trade finance and services, investment, treasury, corporate collection and payment, e-commerce, and card services; small business, asset-pledge, machinery and equipment financing, and project financing and syndicated loans; and payroll, custody, and cash management services; and business comprehensive, property, liability, group, and retailer comprehensive insurance plans. In addition, it provides investment products and services, including securities, foreign exchange, fund, precious metals and FX margin, bonds, currency linked investment, structured products, bonds, and savings plans. The company operates approximately 200 branches, 270 automated banking centers, and approximately 1,000 self-service machines. BOC Hong Kong (Holdings) Limited was founded in 1917 and is based in Central, Hong Kong. The company is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange. BOC Hong Kong (Holdings) Limited is a subsidiary of BOC Hong Kong (BVI) Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 12:46
End of Day Share Price2020/02/25 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.