Bank of Communications (SEHK:3328) - Share price, News & Analysis

Q: What is the Fair Price of 3328 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

3328 (HK$5.33) is trading below our estimate of [[fair value]] (HK$23.85)

3328 fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	1/6
Past Performance	4/6
Financial Health	6/6
Dividends	6/6

3328 Stock Overview

Bank of Communications Co., Ltd. provides commercial banking products and services.

Rewards

Trading at 77.6% below our estimate of its fair value

Earnings are forecast to grow 8.28% per year

Earnings grew by 12.1% over the past year

Pays a high and reliable dividend of 7.81%

Risk Analysis

No risks detected for 3328 from our risk checks.

Bank of Communications Competitors

Postal Savings Bank of China

SEHK:1658

HK$569.3b

BOC Hong Kong (Holdings)

SEHK:2388

HK$333.6b

China CITIC Bank

SEHK:998

HK$241.5b

Hang Seng Bank

SEHK:11

HK$264.2b

Price History & Performance

Summary of all time highs, changes and price drops for Bank of Communications
Historical stock prices
Current Share Price	HK$5.33
52 Week High	HK$5.74
52 Week Low	HK$4.35
Beta	0.46
1 Month Change	-0.37%
3 Month Change	-2.91%
1 Year Change	2.50%
3 Year Change	-11.90%
5 Year Change	-3.44%
Change since IPO	107.54%

Recent News & Updates

May 04

Do Bank of Communications's (HKG:3328) Earnings Warrant Your Attention?

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...

Jan 13

I Ran A Stock Scan For Earnings Growth And Bank of Communications (HKG:3328) Passed With Ease

It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...

Shareholder Returns

	3328	HK Banks	HK Market
7D	0.6%	-0.9%	1.7%
1Y	2.5%	0.1%	-21.2%

Return vs Industry: 3328 exceeded the Hong Kong Banks industry which returned 0.1% over the past year.

Return vs Market: 3328 exceeded the Hong Kong Market which returned -21.2% over the past year.

Price Volatility

Is 3328's price volatile compared to industry and market?
3328 volatility
3328 Average Weekly Movement	2.3%
Banks Industry Average Movement	3.0%
Market Average Movement	6.9%
10% most volatile stocks in HK Market	13.8%
10% least volatile stocks in HK Market	3.4%

Stable Share Price: 3328 is less volatile than 75% of Hong Kong stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: 3328's weekly volatility (2%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1908	89,890	Jun Liu	https://www.bankcomm.com

Bank of Communications Co., Ltd. provides commercial banking products and services. The company offers personal banking products and services, including demand, time, call, withdrawal, foreign currency, swap management, and education deposits, as well as certificate of deposits; credit and debit cards; housing and personal loans; and wealth management products, and wealth management advisory and consulting services. It also provides corporate banking products and services, such as corporate time and demand structured deposits; cash management services, such as accounts receivable/accounts payable management, account management, liquidity management, and investment and financing management; financing, settlement, and risk management services; financing services; syndicated loans; overdrafts; investment banking services; offshore banking services, including forex deposit and loan, inter-bank loan, international settlement, forex trading and guarantee, business advisory, and other services; and precious metal leasing and commodity trading services.

Bank of Communications Fundamentals Summary

How do Bank of Communications's earnings and revenue compare to its market cap?
3328 fundamental statistics
Market Cap	CN¥352.07b
Earnings (TTM)	CN¥83.36b
Revenue (TTM)	CN¥207.66b

4.1x

P/E Ratio

0.4x

P/B Ratio

Is 3328 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
3328 income statement (TTM)
Revenue	CN¥207.66b
Cost of Revenue	CN¥0
Gross Profit	CN¥207.66b
Other Expenses	CN¥124.30b
Earnings	CN¥83.36b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.12
Gross Margin	100.00%
Net Profit Margin	40.14%
Debt/Equity Ratio	251.9%

How did 3328 perform over the long term?

See historical performance and comparison

Dividends

7.8%

Current Dividend Yield

32%

Payout Ratio

Does 3328 pay a reliable dividends?

See 3328 dividend history and benchmarks

When do you need to buy 3328 by to receive an upcoming dividend?
Bank of Communications dividend dates
Ex Dividend Date	Jul 04 2022
Dividend Pay Date	Aug 02 2022
Days until Ex dividend	5 days
Days until Dividend pay date	34 days

Does 3328 pay a reliable dividends?

See 3328 dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is 3328 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 3328?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 3328. This is calculated by dividing 3328's market cap by their current preferred multiple.
What is 3328's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥352.07b

3328 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/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	0.5x

Price to Earnings Ratio vs Peers

How does 3328's PE Ratio compare to its peers?

3328 PE Ratio vs Peers

The above table shows the PE ratio for 3328 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	10.9x
1658 Postal Savings Bank of China	6.4x	13.6%	HK$569.3b
2388 BOC Hong Kong (Holdings)	14.5x	14.1%	HK$333.6b
998 China CITIC Bank	2.7x	10.7%	HK$241.5b
11 Hang Seng Bank	19.9x	19.3%	HK$264.2b
3328 Bank of Communications	4.1x	8.3%	HK$415.3b

Forward PE

Price-To-Earnings vs Peers: 3328 is good value based on its Price-To-Earnings Ratio (4.1x) compared to the peer average (10.9x).

Price to Earnings Ratio vs Industry

How does 3328's PE Ratio compare vs other companies in the HK Banks Industry?

Price-To-Earnings vs Industry: 3328 is good value based on its Price-To-Earnings Ratio (4.1x) compared to the Hong Kong Banks industry average (5.6x)

Price to Earnings Ratio vs Fair Ratio

What is 3328'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.

3328 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	4.1x
Fair PE Ratio	5.7x

Price-To-Earnings vs Fair Ratio: 3328 is good value based on its Price-To-Earnings Ratio (4.1x) compared to the estimated Fair Price-To-Earnings Ratio (5.7x).

Share Price vs Fair Value

What is the Fair Price of 3328 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 3328 (HK$5.33) is trading below our estimate of fair value (HK$23.85)

Significantly Below Fair Value: 3328 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 3328 is good value based on its PEG Ratio (0.5x)

Discover undervalued companies

Future Growth

How is Bank of Communications forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

8.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3328's forecast earnings growth (8.3% per year) is above the savings rate (1.5%).

Earnings vs Market: 3328's earnings (8.3% per year) are forecast to grow slower than the Hong Kong market (17.1% per year).

High Growth Earnings: 3328's earnings are forecast to grow, but not significantly.

Revenue vs Market: 3328's revenue (7.8% per year) is forecast to grow slower than the Hong Kong market (10.3% per year).

High Growth Revenue: 3328's revenue (7.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 3328's Return on Equity is forecast to be low in 3 years time (10.9%).

Discover growth companies

Past Performance

How has Bank of Communications performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

4.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 3328 has high quality earnings.

Growing Profit Margin: 3328's current net profit margins (40.1%) are lower than last year (40.5%).

Past Earnings Growth Analysis

Earnings Trend: 3328's earnings have grown by 4% per year over the past 5 years.

Accelerating Growth: 3328's earnings growth over the past year (12.1%) exceeds its 5-year average (4% per year).

Earnings vs Industry: 3328 earnings growth over the past year (12.1%) exceeded the Banks industry 11.4%.

Return on Equity

High ROE: 3328's Return on Equity (9%) is considered low.

Discover strong past performing companies

Financial Health

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

Financial Health Score

6/6

Financial Health Score 6/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: 3328's Assets to Equity ratio (12.4x) is moderate.

Allowance for Bad Loans: 3328 has a sufficient allowance for bad loans (152%).

Low Risk Liabilities: 75% of 3328's liabilities are made up of primarily low risk sources of funding.

Loan Level: 3328 has an appropriate level of Loans to Assets ratio (55%).

Low Risk Deposits: 3328's Loans to Deposits ratio (80%) is appropriate.

Level of Bad Loans: 3328 has an appropriate level of bad loans (1.5%).

Discover healthy companies

Dividend

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

Dividend Score

6/6

Dividend Score 6/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

7.81%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: 3328's dividend (7.81%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.7%).

High Dividend: 3328's dividend (7.81%) is in the top 25% of dividend payers in the Hong Kong market (7.78%)

Stability and Growth of Payments

Stable Dividend: 3328's dividends per share have been stable in the past 10 years.

Growing Dividend: 3328's dividend payments have increased over the past 10 years.

Current Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (31.8%), 3328's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: 3328's dividends in 3 years are forecast to be well covered by earnings (31.9% payout ratio).

Discover strong dividend paying companies

Management

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

2.3yrs

Average management tenure

CEO

Jun Liu (49 yo)

1.92yrs

Tenure

CN¥825,500

Compensation

Mr. Jun Liu serves as President at Bank of Communications Co., Ltd. since July 7, 2020 and serves as its Vice Chairman since August 5, 2020. He serves as an Executive Director of Bank of Communications Co....

CEO Compensation Analysis

Compensation vs Market: Jun's total compensation ($USD123.36K) is below average for companies of similar size in the Hong Kong market ($USD1.06M).

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

Leadership Team

Experienced Management: 3328's management team is considered experienced (2.3 years average tenure).

Board Members

Experienced Board: 3328's board of directors are not considered experienced ( 2.8 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.

Recent Insider Transactions

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/06/28 00:00
End of Day Share Price	2022/06/28 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31