SEHK:3988

Stock Analysis Report

Executive Summary

Bank of China Limited, together with its subsidiaries, provides a range of banking and related financial services in the People’s Republic of China and internationally.

Snowflake

Fundamentals

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


Market Performance


7 Day Return

3.6%

SEHK:3988

3.7%

HK Banks

2.5%

HK Market


1 Year Return

-6.2%

SEHK:3988

-7.1%

HK Banks

-3.9%

HK Market

3988 matched the Banks industry (-7.1%) over the past year.

3988 underperformed the Market in Hong Kong which returned -3.9% over the past year.


Share holder returns

3988IndustryMarket
7 Day3.6%3.7%2.5%
30 Day7.0%7.4%7.6%
90 Day0%-2.8%0.8%
1 Year-0.3%-6.2%-2.2%-7.1%-0.4%-3.9%
3 Year6.6%-9.9%17.0%0.5%19.6%7.6%
5 Year16.9%-11.6%29.6%-0.6%17.7%-1.7%

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

Valuation

Is Bank of China undervalued based on future cash flows and its price relative to the stock market?

>50%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Bank of China's share price is below the future cash flow value, and at a moderate discount (> 20%).

Bank of China's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

Bank of China is good value based on earnings compared to the HK Banks industry average.

Bank of China is good value based on earnings compared to the Hong Kong market.


Price Based on Expected Growth

Bank of China is good value based on expected growth next year.


Price Based on Value of Assets

Bank of China is good value based on assets compared to the HK Banks industry average.


Next Steps

Future Growth

How is Bank of China expected to perform in the next 1 to 3 years based on estimates from 19 analysts?

5.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Bank of China's revenue is expected to grow by 7.8% yearly, however this is not considered high growth (20% yearly).

Bank of China's earnings are expected to grow by 5.5% yearly, however this is not considered high growth (20% yearly).

Bank of China's revenue growth is positive but not above the Hong Kong market average.

Bank of China's earnings growth is positive but not above the Hong Kong market average.

Bank of China's earnings growth is expected to exceed the low risk savings rate of 2%.


Earnings per Share Growth Estimates


Future Return on Equity

Bank of China is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

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

0.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Bank of China's year on year earnings growth rate has been positive over the past 5 years.

Bank of China's 1-year earnings growth exceeds its 5-year average (5.2% vs 0.6%)

Bank of China's earnings growth has not exceeded the HK Banks industry average in the past year (5.2% vs 5.2%).


Return on Equity

Bank of China has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Bank of China used its assets more efficiently than the HK Banks industry average last year based on Return on Assets.


Return on Capital Employed

Unable to establish if Bank of China improved its use of capital last year versus 3 years ago (Return on Capital Employed) due to insufficient past data.


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

Information is not available.

Information is not available.


Financial Institutions Analysis

Bank of China has an acceptable proportion of non-loan assets held.

Bank of China has a sufficient allowance for bad loans.

Bank of China's liabilities are made up of primarily low risk sources of funding.

Bank of China's level of assets compared to its equity is moderate (i.e. an appropriate level of borrowing to fund lending).

Loans at Bank of China are broadly funded by customer deposits.

Bank of China has an acceptable level of bad loans (less than 2%).


Next Steps

Dividend

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

7.00%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Bank of China's pays a higher dividend yield than the bottom 25% of dividend payers in Hong Kong (2.19%).

Bank of China's dividend is above the markets top 25% of dividend payers in Hong Kong (6.06%).

Dividends per share have been stable in the past 10 years.

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (3.3x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (3.3x coverage).


Next Steps

Management

What is the CEO of Bank of China's salary, the management and board of directors tenure and is there insider trading?

1.2yrs

Average management tenure


CEO

Liange Liu (58yo)

1.2yrs

Tenure

CN¥232,000

Compensation

Mr. Liu Liange serves as a Chairman at Bank of China Limited since April 28, 2019. Mr. Liu serves as Chairman of Board at Bank Of China (Hungária) Hitelintézet Zrt. since 2019. Mr. Liu served as a Vice Cha ...


CEO Compensation Analysis

Liange's remuneration is lower than average for companies of similar size in Hong Kong.

Insufficient data for Liange to compare compensation growth.


Management Age and Tenure

1.2yrs

Average Tenure

56yo

Average Age

The average tenure for the Bank of China management team is less than 2 years, this suggests a new team.


Board Age and Tenure

1.4yrs

Average Tenure

55yo

Average Age

The average tenure for the Bank of China board of directors is less than 3 years, this suggests a new board.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellCN¥416,671,43905 Sep 19
BlackRock, Inc.
EntityCompany
Shares140,896,000
Max PriceCN¥2.96
SellCN¥27,423,22513 Nov 18
National Council for Social Security Fund
EntityCompany
Shares8,000,000
Max PriceCN¥3.43

Ownership Breakdown


Management Team

  • Liange Liu (58yo)

    Chairman & President

    • Tenure: 1.2yrs
    • Compensation: CN¥232.00k
  • Wei Xiao (59yo)

    Chief Audit Officer

    • Tenure: 4.8yrs
    • Compensation: CN¥1.17m
  • Jiandong Liu (50yo)

    Chief Risk Officer

    • Tenure: 0.6yrs
  • Yu Sun (46yo)

    Executive Vice President

    • Tenure: 1yrs
    • Compensation: CN¥272.50k
  • Zhe Yang

    IR Manager

    • Tenure: 0yrs
  • Feiqi Mei (57yo)

    Secretary to the Board of Directors & Company Secretary

    • Tenure: 1.5yrs
    • Compensation: CN¥757.50k
  • Jingzhen Lin (54yo)

    Executive VP & Executive Director

    • Tenure: 0.6yrs
    • Compensation: CN¥477.40k
  • Qiuwan Liu (58yo)

    Chief Information Officer

    • Tenure: 1.3yrs
    • Compensation: CN¥551.80k
  • Zhiheng Wang (46yo)

    GM of Human Resources Department - Head Office & Employee Supervisor

    • Tenure: 0.8yrs
  • Fulin Wu (56yo)

    Executive VP & Executive Director

    • Tenure: 0.6yrs

Board Members

  • Muhua Chen (98yo)

    Honorary Chairperson of the Board

    • Tenure: 15.1yrs
  • Angela A. Chao (46yo)

    Independent Non-Executive Director

    • Tenure: 2.7yrs
    • Compensation: CN¥425.00k
  • Liange Liu (58yo)

    Chairman & President

    • Tenure: 1.2yrs
    • Compensation: CN¥232.00k
  • Xiquan Wang (59yo)

    Chairman of Board of Supervisors

    • Tenure: 2.8yrs
  • Xiaoya Wang (55yo)

    Non-Executive Director

    • Tenure: 2.1yrs
  • Changyun Wang (55yo)

    Independent Non-Executive Director

    • Tenure: 3.1yrs
    • Compensation: CN¥493.00k
  • Jingzhen Lin (54yo)

    Executive VP & Executive Director

    • Tenure: 0.6yrs
    • Compensation: CN¥477.40k
  • Guohua Jiang (48yo)

    Independent Non-Executive Director

    • Tenure: 0.8yrs
    • Compensation: CN¥17.00k
  • Zhiheng Wang (46yo)

    GM of Human Resources Department - Head Office & Employee Supervisor

    • Tenure: 0.8yrs
  • Fulin Wu (56yo)

    Executive VP & Executive Director

    • Tenure: 0.6yrs

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$1.120t
  • Shares outstanding: 294.37b
  • Website: https://www.boc.cn

Number of Employees


Location

  • Bank of China Limited
  • No. 1 Fuxingmen Nei Dajie
  • Beijing
  • 100818
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BACH.FOTCPK (Pink Sheets LLC)YesForeign Shares-Foreign ListedUSUSDJun 2006
3988SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDJun 2006
W8VDB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURJun 2006
3988SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDJun 2006
3988SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDJun 2006
601988SHSE (Shanghai Stock Exchange)Domestic SharesCNCNYJul 2006
601988XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)Domestic SharesCNCNYJul 2006
BACH.YOTCPK (Pink Sheets LLC)ADRUSUSDOct 2008

Biography

Bank of China Limited, together with its subsidiaries, provides a range of banking and related financial services in the People’s Republic of China and internationally. It operates in six segments: Corpora ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/15 12:44
End of Day Share Price2019/09/13 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.