SEHK:3988

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

Bank of China Limited, together with its subsidiaries, provides a range of banking and related financial services. More Details


Snowflake Analysis

Flawless balance sheet 6 star dividend payer.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.4%

3988

-3.6%

HK Banks

-2.6%

HK Market


1 Year Return

-22.1%

3988

-23.2%

HK Banks

-2.3%

HK Market

Return vs Industry: 3988 exceeded the Hong Kong Banks industry which returned -23.2% over the past year.

Return vs Market: 3988 underperformed the Hong Kong Market which returned -2.3% over the past year.


Shareholder returns

3988IndustryMarket
7 Day-2.4%-3.6%-2.6%
30 Day-5.5%-10.4%-7.3%
90 Day-18.6%-18.0%-0.5%
1 Year-16.6%-22.1%-18.4%-23.2%1.8%-2.3%
3 Year-28.5%-40.6%-24.9%-36.0%-10.2%-20.1%
5 Year-10.0%-33.5%5.0%-20.6%14.7%-4.9%

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 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$2.4) is trading below our estimate of fair value (HK$6.68)

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 (3.9x) compared to the HK Banks industry average (5.3x).

PE vs Market: 3988 is good value based on its PE Ratio (3.9x) compared to the Hong Kong market (11.1x).


Price to Earnings Growth Ratio

PEG Ratio: 3988 is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: 3988's PB Ratio (0.3x) is in line with the HK Banks industry average.


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?

8.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3988's forecast earnings growth (8.6% per year) is above the savings rate (1.6%).

Earnings vs Market: 3988's earnings (8.6% per year) are forecast to grow slower than the Hong Kong market (22.4% per year).

High Growth Earnings: 3988's earnings are forecast to grow, but not significantly.

Revenue vs Market: 3988's revenue (9.3% per year) is forecast to grow slower than the Hong Kong market (13.2% per year).

High Growth Revenue: 3988's revenue (9.3% 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 (9.5%).


Next Steps

Past Performance

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

1.2%

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 (37.9%) are lower than last year (41.8%).


Past Earnings Growth Analysis

Earnings Trend: 3988's earnings have grown by 1.2% per year over the past 5 years.

Accelerating Growth: 3988's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 3988 had negative earnings growth (-8.8%) over the past year, making it difficult to compare to the Banks industry average (-6%).


Return on Equity

High ROE: 3988's Return on Equity (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 (11.6x) is moderate.

Allowance for Bad Loans: 3988 has a sufficient allowance for bad loans (186%).

Low Risk Liabilities: 77% 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 (81%) is appropriate.

Level of Bad Loans: 3988 has an appropriate level of bad loans (1.4%).


Next Steps

Dividend

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

9.05%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 3988's dividend (9.05%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.31%).

High Dividend: 3988's dividend (9.05%) 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 (34.9%), 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 (31.4% payout ratio).


Next Steps

Management

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

2.0yrs

Average management tenure


CEO

Jiang Wang (57 yo)

0.75

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

NamePositionTenureCompensationOwnership
Liange Liu
Chairman of the Board1.17yrsCN¥725.80kno data
Qiuwan Liu
Chief Information Officer2.25yrsCN¥1.13mno data
Wei Xiao
Chief Audit Officer5.83yrsCN¥1.12mno data
Jiandong Liu
Chief Risk Officer1.5yrsCN¥940.30kno data
Yu Sun
Executive Vice President2yrsCN¥666.40k0%
CN¥ 0
Guoyu Zheng
Executive Vice President1.67yrsCN¥387.90kno data
Jingzhen Lin
Executive VP & Executive Director1.5yrsCN¥666.40kno data
Wei Wang
Executive VP & Executive Director0.25yrCN¥55.40kno data
Feiqi Mei
Secretary to the Board of Directors & Company Secretary2.5yrsCN¥1.11mno data
Jiang Wang
President & Vice Chairman0.75yrno datano data
Zhe Yang
IR Managerno datano datano data
Zhiheng Wang
GM of Human Resources Department - Head Office & Employee Supervisor1.75yrsno datano data

2.0yrs

Average Tenure

57yo

Average Age

Experienced Management: 3988's management team is considered experienced (2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Liange Liu
Chairman of the Board1.17yrsCN¥725.80kno data
Jingzhen Lin
Executive VP & Executive Director1.5yrsCN¥666.40kno data
Wei Wang
Executive VP & Executive Director0.25yrCN¥55.40kno data
Jiang Wang
President & Vice Chairman0.75yrno datano data
Zhiheng Wang
GM of Human Resources Department - Head Office & Employee Supervisor1.75yrsno datano data
Muhua Chen
Honorary Chairperson of the Board16.08yrsno datano data
Angela A. Chao
Independent Non-Executive Director3.67yrsCN¥450.00kno data
Xiquan Wang
Chairman of Board of Supervisors3.83yrsno datano data
Xiaoya Wang
Non-Executive Director3.08yrsno datano data
Changyun Wang
Independent Non-Executive Director4.08yrsCN¥620.80kno data
Guohua Jiang
Independent Non-Executive Director1.75yrsCN¥454.90kno data
Sai Peng Chui
Independent Non-Executive Directorno datano datano data

1.8yrs

Average Tenure

56.5yo

Average Age

Experienced Board: 3988's board of directors are not considered experienced ( 1.8 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.


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$966.748b
  • 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

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)UNSP ADR EACH REP 25 ORDUSUSDOct 2008
W8VSDB (Deutsche Boerse AG)UNSP ADR EACH REP 25 ORDDEEUROct 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, Inv ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/09/30 12:38
End of Day Share Price2020/09/30 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.