A Look at Bank of China (SEHK:3988) Valuation Following Regulatory Approval of Governance Amendments

Bank of China (SEHK:3988) recently received approval from the National Financial Regulatory Administration on amendments to its Articles of Association. This signals upcoming changes in its governance structure that could influence future strategic decisions.

See our latest analysis for Bank of China.

With regulatory approval now in place, Bank of China’s strategic moves are being closely watched, but so far this momentum hasn’t translated into dramatic share price swings. The latest share price sits at HK$4.20, and while the one-year total shareholder return is just above flat, the bank has quietly delivered steady, positive total returns for three and five years. This suggests patient investors have seen gradual progress.

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With Bank of China trading at a notable discount to analysts’ price targets and showing steady growth in both revenue and net income, the real question is whether there is genuine value left on the table or if the market already reflects the bank’s future prospects.

Most Popular Narrative: 19.1% Undervalued

Compared to the latest price of HK$4.20, the narrative’s fair value is anchored at HK$5.19. This notable gap captures market attention and raises key questions about future growth pathways and the assumptions backing analyst models.

The ongoing expansion of China's middle class and rapid urbanization is expected to drive long-term demand for retail financial services, personal loans, consumer finance, and wealth management products. This supports revenue growth and diversification away from interest income. The acceleration of the Belt and Road Initiative and international trade growth, combined with Bank of China's strong overseas network, is positioning the bank to capture higher cross-border financing, trade settlement, and RMB clearing revenues. This boosts non-interest income and overall earnings resilience.

Read the complete narrative.

Curious what numbers make this estimate possible? Dive into the growth blueprint built on ambitious profit trajectories, bold sector bets, and a future earnings multiple rivaling global banking leaders. Find out which financial forecasts underpin the analyst fair value by reading the full narrative.

Result: Fair Value of $5.19 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks such as persistent low interest rates and rising asset quality concerns could act as catalysts and potentially challenge the current growth narrative.

Find out about the key risks to this Bank of China narrative.

Build Your Own Bank of China Narrative

If the analysis so far doesn't quite capture your view or you want to see for yourself, why not shape your perspective with real data in minutes and Do it your way

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding Bank of China.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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