SEHK:3328

Stock Analysis Report

Bank of Communications

Executive Summary

Bank of Communications Co., Ltd. provides commercial banking products and services primarily in the People’s Republic of China, Hong Kong, Macau, Taiwan, and internationally.

Rewards

Trading at 61.8% below its fair value

Earnings are forecast to grow 5.75% per year

Earnings grew by 4.9% over the past year

Risk Analysis

Unstable dividend track record



Snowflake Analysis

Very undervalued with flawless balance sheet and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 3328 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.0%

3328

2.0%

HK Banks

1.7%

HK Market


1 Year Return

-21.0%

3328

-8.8%

HK Banks

-2.9%

HK Market

Return vs Industry: 3328 underperformed the Hong Kong Banks industry which returned -8.8% over the past year.

Return vs Market: 3328 underperformed the Hong Kong Market which returned -2.9% over the past year.


Shareholder returns

3328IndustryMarket
7 Day1.0%2.0%1.7%
30 Day-6.4%-4.0%-4.2%
90 Day-1.7%0.3%4.6%
1 Year-16.7%-21.0%-4.0%-8.8%0.7%-2.9%
3 Year-0.9%-16.2%8.4%-6.6%15.3%3.6%
5 Year2.8%-22.1%15.5%-11.4%15.9%-3.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Bank of Communications 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: 3328 (HK$5.14) is trading below our estimate of fair value (HK$13.45)

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


Price To Earnings Ratio

PE vs Industry: 3328 is good value based on its PE Ratio (4.7x) compared to the Banks industry average (5.7x).

PE vs Market: 3328 is good value based on its PE Ratio (4.7x) compared to the Hong Kong market (10.1x).


Price to Earnings Growth Ratio

PEG Ratio: 3328 is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: 3328 is good value based on its PB Ratio (0.5x) compared to the HK Banks industry average (0.5x).


Next Steps

Future Growth

How is Bank of Communications forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

5.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3328's forecast earnings growth (5.8% per year) is above the savings rate (1.6%).

Earnings vs Market: 3328's earnings (5.8% per year) are forecast to grow slower than the Hong Kong market (11.7% per year).

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

Revenue vs Market: 3328's revenue (6.3% per year) is forecast to grow slower than the Hong Kong market (10.5% per year).

High Growth Revenue: 3328's revenue (6.3% 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 (10.5%).


Next Steps

Past Performance

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

2.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 3328 has high quality earnings.

Growing Profit Margin: 3328's current net profit margins (40.8%) are lower than last year (42.9%).


Past Earnings Growth Analysis

Earnings Trend: 3328's earnings have grown by 2.1% per year over the past 5 years.

Accelerating Growth: 3328's earnings growth over the past year (4.9%) exceeds its 5-year average (2.1% per year).

Earnings vs Industry: 3328 earnings growth over the past year (4.9%) exceeded the Banks industry 3.7%.


Return on Equity

High ROE: 3328's Return on Equity (9.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Bank of Communications'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: 3328 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 3328's debt is covered by short term assets (assets are 7.6x debt).


Financial Institutions Analysis

Asset Level: 3328's level of assets compared to its equity is moderate.

Allowance for Bad Loans: 3328 has a sufficient allowance for bad loans.

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

Loan Level: 3328 has an acceptable proportion of non-loan assets held.

Low Risk Deposits: 3328's loans are broadly funded by customer deposits.

Level of Bad Loans: 3328 has an appropriate level of bad loans (1.47%)


Next Steps

Dividend

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

6.49%

Current Dividend Yield


Dividend Yield vs Market

company6.5%marketbottom25%2.3%markettop25%6.3%industryaverage5.4%forecastin3Years7.2%

Current dividend yield vs market & industry

Notable Dividend: 3328's dividend (6.49%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.27%).

High Dividend: 3328's dividend (6.49%) is in the top 25% of dividend payers in the Hong Kong market (6.34%)


Stability and Growth of Payments

Stable Dividend: 3328's dividend payments have been volatile in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.4%), 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 (30.7% payout ratio).


Next Steps

Management

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

1.6yrs

Average management tenure


CEO

Bank of Communications has no CEO, or we have no data on them.


Leadership Team

NamePositionTenureCompensationOwnership
Deqi Ren
Executive Chairman of the Board0yrsCN¥375.60k0.00013% CN¥533.5k
Weidong Hou
Executive VP & Executive Director4.3yrsCN¥665.40k0.00013% CN¥533.5k
Zhao Wu
Strategic Cooperation Consultant6.9yrsno datano data
Han Xu
Chief Business Officer of Retail & Private Business1.4yrsCN¥293.60k0.00011% CN¥451.4k
Hong Tu
Chief Business Officer of Interbank & Market Business1.4yrsCN¥293.60k0.000070% CN¥287.3k
Eric Pan
Senior Manager0yrsno datano data
Mang Guo
Executive Vice President1.6yrsCN¥1.12m0.000070% CN¥287.3k
Jiajin Lyu
Executive Vice President1.1yrsno datano data
Junkang Xu
General Manager0yrsno datano data
Siu Ng
HSBC-BoCom Strategic Cooperation Consultant & Senior Management Member6.9yrsno data0.000040% CN¥164.1k

1.6yrs

Average Tenure

57yo

Average Age

Experienced Management: 3328's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Deqi Ren
Executive Chairman of the Board0yrsCN¥375.60k0.00013% CN¥533.5k
Weidong Hou
Executive VP & Executive Director4.3yrsCN¥665.40k0.00013% CN¥533.5k
Chi Wai Yeung
Independent Non-Executive Director3.3yrsCN¥250.00kno data
Haoyi Cai
Independent Non-Executive Director1.5yrsno datano data
Jian Li
Independent Non-Executive Director5.3yrsCN¥250.00kno data
Li Liu
Independent Non-Executive Director5.4yrsCN¥250.00kno data
Taiyin Wang
Non-Executive Director6.5yrsCN¥841.50k0.00018% CN¥738.7k
Haoyang Liu
Non-Executive Director3.5yrsno datano data
Zhaobin He
Non-Executive Director2.5yrsCN¥882.10k0.000030% CN¥123.1k
Guobin Song
Non-Executive Director2.5yrsCN¥882.10k0.000030% CN¥123.1k

3.5yrs

Average Tenure

57.5yo

Average Age

Experienced Board: 3328's board of directors are considered experienced (3.5 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

Bank of Communications Co., Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Bank of Communications Co., Ltd.
  • Ticker: 3328
  • Exchange: SEHK
  • Founded: 1908
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: HK$410.363b
  • Shares outstanding: 74.26b
  • Website: https://www.bankcomm.com

Number of Employees


Location

  • Bank of Communications Co., Ltd.
  • 188 Yin Cheng Zhong Lu
  • Pilot Free Trade Zone
  • Shanghai
  • 200120
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
3328SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDJun 2005
C4CDB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURJun 2005
BKFC.FOTCPK (Pink Sheets LLC)YesForeign Shares-Foreign ListedUSUSDJun 2005
3328SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDJun 2005
3328SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDJun 2005
601328SHSE (Shanghai Stock Exchange)Domestic SharesCNCNYMay 2007
601328XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)Domestic SharesCNCNYMay 2007
BCMX.YOTCPK (Pink Sheets LLC)ADRUSUSDOct 2008

Biography

Bank of Communications Co., Ltd. provides commercial banking products and services primarily in the People’s Republic of China, Hong Kong, Macau, Taiwan, and internationally. The company offers personal banking products and services, including demand deposits, time deposits, call deposits, and education deposits; credit cards, quasi-credit cards, and debit cards; housing and personal loans; and publicly and privately-offered wealth management products, and wealth management advisory and consulting services. It also provides corporate banking products and services, such as corporate time and demand 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; overdraft services; investment banking services; offshore banking services, including foreign deposit and loan, inter-bank loan, international settlement, foreign trading and guarantee, business advisory, and other services; and precious metal leasing and commodity trading services. In addition, the company offers international banking services comprising personal and corporate foreign exchange wealth management, import and export settlement, document settlement, remittance and bill, trade finance, and offshore banking services. Further, it provides treasury, asset management, trustee, insurance, financial leasing, debt-to-equity swap, and other financial services; trust investment, fund management, securities dealing and brokerage, and reinsurance services; and e-banking services. It has 201 branches and 3,241 banking outlets in China; 66 overseas banking outlets; and 1 representative office in Toronto. Bank of Communications Co., Ltd. was founded in 1908 and is headquartered in Shanghai, China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 12:51
End of Day Share Price2020/02/14 00:00
Earnings2019/09/30
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.