Executive Summary
Bank of China Limited, together with its subsidiaries, provides a range of banking and related financial services.
Rewards
Risk Analysis
Snowflake Analysis
Very undervalued with flawless balance sheet and pays a dividend.
Similar Companies
Share Price & News
How has Bank of China's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: 3988 has not had significant price volatility in the past 3 months.
Market Performance
7 Day Return
4.9%
3988
4.6%
HK Banks
5.8%
HK Market
1 Year Return
-7.2%
3988
-7.3%
HK Banks
-4.0%
HK Market
Return vs Industry: 3988 matched the Hong Kong Banks industry which returned -7.3% over the past year.
Return vs Market: 3988 underperformed the Hong Kong Market which returned -4% over the past year.
Shareholder returns
| 3988 | Industry | Market | |
|---|---|---|---|
| 7 Day | 4.9% | 4.6% | 5.8% |
| 30 Day | 2.8% | 2.9% | 4.0% |
| 90 Day | -3.9% | -2.3% | -2.6% |
| 1 Year | -7.2%-7.2% | -3.2%-7.3% | -0.6%-4.0% |
| 3 Year | -9.5%-23.5% | 3.0%-11.6% | 1.3%-9.2% |
| 5 Year | -26.2%-44.2% | -6.5%-28.4% | -9.2%-23.5% |
Price Volatility Vs. Market
How volatile is Bank of China's share price compared to the market and industry in the last 5 years?
Simply Wall St News
2 weeks ago | Simply Wall St
Volatility 101: Should Bank of China (HKG:3988) Shares Have Dropped 46%?1 month ago | Simply Wall St
Do Directors Own Bank of China Limited (HKG:3988) Shares?2 months ago | Simply Wall St
Bank of China Limited's (HKG:3988) Attractive Combination: Does It Earn A Place In Your Dividend Portfolio?Valuation
Is Bank of China 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: 3988 (HK$2.97) is trading below our estimate of fair value (HK$6.64)
Significantly Below Fair Value: 3988 is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: 3988 is good value based on its PE Ratio (4.4x) compared to the Banks industry average (5.3x).
PE vs Market: 3988 is good value based on its PE Ratio (4.4x) compared to the Hong Kong market (9.5x).
Price to Earnings Growth Ratio
PEG Ratio: 3988 is good value based on its PEG Ratio (1x)
Price to Book Ratio
PB vs Industry: 3988 is good value based on its PB Ratio (0.4x) compared to the HK Banks industry average (0.5x).
Next Steps
Future Growth
How is Bank of China forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?
4.6%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: 3988's forecast earnings growth (4.6% per year) is above the savings rate (1.6%).
Earnings vs Market: 3988's earnings (4.6% per year) are forecast to grow slower than the Hong Kong market (17.1% per year).
High Growth Earnings: 3988's earnings are forecast to grow, but not significantly.
Revenue vs Market: 3988's revenue (7% per year) is forecast to grow slower than the Hong Kong market (10.6% per year).
High Growth Revenue: 3988's revenue (7% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: 3988's Return on Equity is forecast to be low in 3 years time (10%).
Next Steps
Past Performance
How has Bank of China performed over the past 5 years?
1.6%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: 3988 has a high level of non-cash earnings.
Growing Profit Margin: 3988's current net profit margins (40.5%) are lower than last year (43.1%).
Past Earnings Growth Analysis
Earnings Trend: 3988's earnings have grown by 1.6% per year over the past 5 years.
Accelerating Growth: 3988's earnings growth over the past year (3.9%) exceeds its 5-year average (1.6% per year).
Earnings vs Industry: 3988 earnings growth over the past year (3.9%) underperformed the Banks industry 4.7%.
Return on Equity
High ROE: 3988's Return on Equity (9.9%) is considered low.
Next Steps
Financial Health
How is Bank of China'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: 3988's Assets to Equity ratio (11.7x) is moderate.
Allowance for Bad Loans: 3988 has a sufficient allowance for bad loans (184%).
Low Risk Liabilities: 76% of 3988's liabilities are made up of primarily low risk sources of funding.
Loan Level: 3988 has an appropriate level of Loans to Assets ratio (56%).
Low Risk Deposits: 3988's Loans to Deposits ratio (80%) is appropriate.
Level of Bad Loans: 3988 has an appropriate level of bad loans (1.4%).
Next Steps
Dividend
What is Bank of China's current dividend yield, its reliability and sustainability?
7.04%
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
Notable Dividend: 3988's dividend (7.04%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.43%).
High Dividend: 3988's dividend (7.04%) is in the top 25% of dividend payers in the Hong Kong market (7.03%)
Stability and Growth of Payments
Stable Dividend: 3988's dividends per share have been stable in the past 10 years.
Growing Dividend: 3988's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its reasonably low payout ratio (31.1%), 3988's dividend payments are well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: 3988's dividends in 3 years are forecast to be well covered by earnings (31% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
1.8yrs
Average management tenure
CEO
Jiang Wang (56yo)
0.50
Tenure
Mr. Jiang Wang serves as Vice Chairman and Non-Executive Director of BOC Hong Kong (Holdings) Ltd. and Bank of China (Hong Kong) Limited since March 20, 2020. Mr. Wang serves as Vice Chairman of Bank of Ch ...
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Chairman of the Board | 0.92yr | CN¥725.80k | no data | |
| Chief Information Officer | 2yrs | CN¥1.13m | no data | |
| Chief Audit Officer | 5.58yrs | CN¥1.12m | no data | |
| Chief Risk Officer | 1.33yrs | CN¥940.30k | no data | |
| Executive Vice President | 1.75yrs | CN¥666.40k | no data | |
| Executive Vice President | 1.42yrs | CN¥387.90k | no data | |
| Executive VP & Executive Director | 1.33yrs | CN¥666.40k | no data | |
| Executive Vice President | 0.50yr | CN¥55.40k | no data | |
| Secretary to the Board of Directors & Company Secretary | 2.25yrs | CN¥1.11m | no data | |
| President & Vice Chairman | 0.50yr | no data | no data |
1.8yrs
Average Tenure
56yo
Average Age
Experienced Management: 3988's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Chairman of the Board | 0.92yr | CN¥725.80k | no data | |
| Executive VP & Executive Director | 1.33yrs | CN¥666.40k | no data | |
| President & Vice Chairman | 0.50yr | no data | no data | |
| GM of Human Resources Department - Head Office & Employee Supervisor | 1.5yrs | no data | no data | |
| Honorary Chairperson of the Board | 15.83yrs | no data | no data | |
| Independent Non-Executive Director | 3.42yrs | CN¥450.00k | no data | |
| Chairman of Board of Supervisors | 3.58yrs | no data | no data | |
| Non-Executive Director | 2.83yrs | no data | no data | |
| Independent Non-Executive Director | 3.83yrs | CN¥620.80k | no data | |
| Independent Non-Executive Director | 1.5yrs | CN¥454.90k | no data |
2.2yrs
Average Tenure
55yo
Average Age
Experienced Board: 3988's board of directors are not considered experienced ( 2.2 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.
Top Shareholders
Company Information
Bank of China Limited's company bio, employee growth, exchange listings and data sources
Key Information
- Name: Bank of China Limited
- Ticker: 3988
- Exchange: SEHK
- Founded: 1912
- Industry: Diversified Banks
- Sector: Banks
- Market Cap: HK$1.055t
- Shares outstanding: 294.39b
- Website: https://www.boc.cn
Number of Employees
Location
- Bank of China Limited
- No. 1 Fuxingmen Nei Dajie
- Beijing
- Beijing Province
- 100818
- China
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| BACH.F | OTCPK (Pink Sheets LLC) | Yes | Foreign Shares-Foreign Listed | US | USD | Jun 2006 |
| 3988 | SEHK (The Stock Exchange of Hong Kong Ltd.) | Yes | Foreign Shares-Foreign Listed | HK | HKD | Jun 2006 |
| W8V | DB (Deutsche Boerse AG) | Yes | Foreign Shares-Foreign Listed | DE | EUR | Jun 2006 |
| 3988 | SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect) | Yes | Foreign Shares-Foreign Listed | HK | HKD | Jun 2006 |
| 3988 | SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect) | Yes | Foreign Shares-Foreign Listed | HK | HKD | Jun 2006 |
| 601988 | SHSE (Shanghai Stock Exchange) | Domestic Shares | CN | CNY | Jul 2006 | |
| 601988 | XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect) | Domestic Shares | CN | CNY | Jul 2006 | |
| BACH.Y | OTCPK (Pink Sheets LLC) | ADR | US | USD | Oct 2008 | |
| W8VS | DB (Deutsche Boerse AG) | ADR | DE | EUR | Oct 2008 |
Biography
Bank of China Limited, together with its subsidiaries, provides a range of banking and related financial services. It operates in six segments: Corporate Banking, Personal Banking, Treasury Operations, Investment Banking, Insurance, and Other Operations. The Corporate Banking segment offers current accounts, deposits, overdrafts, loans, trade-related products and other credit facilities, foreign exchange, derivatives, and wealth management products to corporate customers, government authorities, and financial institutions. The Personal Banking segment provides savings deposits, personal loans, credit and debit cards, payments and settlements, wealth management products, and funds and insurance agency services to retail customers. The Treasury Operations segment is involved in the foreign exchange transactions, customer-based interest rate and foreign exchange derivative transactions, money market transactions, proprietary trading, and asset and liability management. The Investment Banking segment offers debt and equity underwriting, financial advisory, stock brokerage, investment research and asset management, and private equity investment services, as well as sells and trades in securities. The Insurance segment underwrites general and life insurance products; and provides insurance agency services. It operates approximately 11,699 institutions, including 11,142 institutions in Chinese mainland; and 557 institutions in Hong Kong, Macau, Taiwan, and other countries. The company is also involved in the aircraft leasing business. Bank of China Limited was founded in 1912 and is headquartered in Beijing, China.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/06/06 13:08 |
| End of Day Share Price | 2020/06/05 00:00 |
| Earnings | 2020/03/31 |
| Annual Earnings | 2019/12/31 |
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.