company background image
3988

Bank of China SZSC:3988 Stock Report

Last Price

HK$2.76

Market Cap

HK$974.6b

7D

-1.4%

1Y

1.8%

Updated

08 Aug, 2022

Data

Company Financials +
3988 fundamental analysis
Snowflake Score
Valuation6/6
Future Growth1/6
Past Performance4/6
Financial Health6/6
Dividends6/6

3988 Stock Overview

Bank of China Limited, together with its subsidiaries, provides various banking and financial services.

Bank of China Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Bank of China
Historical stock prices
Current Share PriceHK$2.76
52 Week HighHK$3.20
52 Week LowHK$2.67
Beta0.44
1 Month Change-3.83%
3 Month Change-8.61%
1 Year Change1.85%
3 Year Change-8.00%
5 Year Change-28.13%
Change since IPO-21.59%

Recent News & Updates

Shareholder Returns

3988HK BanksHK Market
7D-1.4%-1.2%-0.7%
1Y1.8%-4.4%-20.5%

Return vs Industry: 3988 exceeded the Hong Kong Banks industry which returned -4.4% over the past year.

Return vs Market: 3988 exceeded the Hong Kong Market which returned -20.5% over the past year.

Price Volatility

Is 3988's price volatile compared to industry and market?
3988 volatility
3988 Average Weekly Movement2.9%
Banks Industry Average Movement3.2%
Market Average Movement6.6%
10% most volatile stocks in HK Market12.9%
10% least volatile stocks in HK Market3.1%

Stable Share Price: 3988 is less volatile than 75% of Hong Kong stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: 3988's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1912306,322Jin Liuhttps://www.boc.cn

Bank of China Limited, together with its subsidiaries, provides various banking and financial services. It operates through 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 currency, derivatives, and wealth management products to corporate customers, government authorities, and financial institutions.

Bank of China Fundamentals Summary

How do Bank of China's earnings and revenue compare to its market cap?
3988 fundamental statistics
Market CapCN¥839.53b
Earnings (TTM)CN¥209.67b
Revenue (TTM)CN¥508.91b

3.3x

P/E Ratio

0.3x

P/B Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
3988 income statement (TTM)
RevenueCN¥508.91b
Cost of RevenueCN¥0
Gross ProfitCN¥508.91b
Other ExpensesCN¥299.24b
EarningsCN¥209.67b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 30, 2022

Earnings per share (EPS)0.71
Gross Margin100.00%
Net Profit Margin41.20%
Debt/Equity Ratio216.2%

How did 3988 perform over the long term?

See historical performance and comparison

Dividends

9.3%

Current Dividend Yield

32%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is 3988 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 3988?

Other financial metrics that can be useful for relative valuation.

3988 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenuen/a
Enterprise Value/EBITDAn/a
PEG Ratio0.5x

Price to Earnings Ratio vs Peers

How does 3988's PE Ratio compare to its peers?

3988 PE Ratio vs Peers
The above table shows the PE ratio for 3988 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average3.9x
1288 Agricultural Bank of China
3.4x7.3%HK$1.1t
939 China Construction Bank
3.5x8.0%HK$1.2t
1398 Industrial & Commercial Bank of China
3.7x6.8%HK$1.7t
1658 Postal Savings Bank of China
5.3x13.2%HK$483.7b
3988 Bank of China
3.3x6.8%HK$974.6b

Price-To-Earnings vs Peers: 3988 is good value based on its Price-To-Earnings Ratio (3.3x) compared to the peer average (3.9x).


Price to Earnings Ratio vs Industry

How does 3988's PE Ratio compare vs other companies in the HK Banks Industry?

Price-To-Earnings vs Industry: 3988 is good value based on its Price-To-Earnings Ratio (3.3x) compared to the Hong Kong Banks industry average (5.3x)


Price to Earnings Ratio vs Fair Ratio

What is 3988's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

3988 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio3.3x
Fair PE Ratio5.8x

Price-To-Earnings vs Fair Ratio: 3988 is good value based on its Price-To-Earnings Ratio (3.3x) compared to the estimated Fair Price-To-Earnings Ratio (5.8x).


Share Price vs Fair Value

What is the Fair Price of 3988 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 3988 (HK$2.76) is trading below our estimate of fair value (HK$14.41)

Significantly Below Fair Value: 3988 is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


Discover undervalued companies

Future Growth

How is Bank of China forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


6.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3988's forecast earnings growth (6.8% per year) is above the savings rate (1.6%).

Earnings vs Market: 3988's earnings (6.8% per year) are forecast to grow slower than the Hong Kong market (16.8% per year).

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

Revenue vs Market: 3988's revenue (7.7% per year) is forecast to grow slower than the Hong Kong market (10.1% per year).

High Growth Revenue: 3988's revenue (7.7% 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 (10.9%).


Discover growth companies

Past Performance

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

Past Performance Score

4/6

Past Performance Score 4/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


4.0%

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 (41.2%) are higher than last year (39.6%).


Past Earnings Growth Analysis

Earnings Trend: 3988's earnings have grown by 4% per year over the past 5 years.

Accelerating Growth: 3988's earnings growth over the past year (15%) exceeds its 5-year average (4% per year).

Earnings vs Industry: 3988 earnings growth over the past year (15%) exceeded the Banks industry 11.2%.


Return on Equity

High ROE: 3988's Return on Equity (9.6%) is considered low.


Discover strong past performing companies

Financial Health

How is Bank of China's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

  • Asset Level

  • Allowance for Bad Loans

  • Low Risk Liabilities

  • Loan Level

  • Low Risk Deposits

  • Level of Bad Loans

Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: 3988's Assets to Equity ratio (11.5x) is moderate.

Allowance for Bad Loans: 3988 has a sufficient allowance for bad loans (187%).

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 (59%).

Low Risk Deposits: 3988's Loans to Deposits ratio (84%) is appropriate.

Level of Bad Loans: 3988 has an appropriate level of bad loans (1.3%).


Discover healthy companies

Dividend

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

Dividend Score

6/6

Dividend Score 6/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage


9.29%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 3988's dividend (9.29%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.87%).

High Dividend: 3988's dividend (9.29%) is in the top 25% of dividend payers in the Hong Kong market (8.36%)


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

Earnings Coverage: With its reasonably low payout ratio (31.6%), 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 (30.9% payout ratio).


Discover strong dividend paying companies

Management

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

1.3yrs

Average management tenure


CEO

Jin Liu (55 yo)

1.33yrs

Tenure

CN¥615,800

Compensation

Mr. Jin Liu serves as Non-Executive Director and Vice Chairman of BOC Hong Kong (Holdings) Ltd. since August 3, 2021. He serves as Non-Executive Director at Bank of China (Hong Kong) Limited since August 3...


CEO Compensation Analysis

Compensation vs Market: Jin's total compensation ($USD91.07K) is below average for companies of similar size in the Hong Kong market ($USD997.65K).

Compensation vs Earnings: Insufficient data to compare Jin's compensation with company performance.


Leadership Team

Experienced Management: 3988's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

Experienced Board: 3988's board of directors are considered experienced (3.4 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.


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 employee growth, exchange listings and data sources


Key Information

  • Name: Bank of China Limited
  • Ticker: 3988
  • Exchange: SZSC
  • Founded: 1912
  • Industry: Diversified Banks
  • Sector: Banks
  • Implied Market Cap: HK$974.639b
  • Shares outstanding: 294.39b
  • Website: https://www.boc.cn

Number of Employees


Location

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

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/08 00:00
End of Day Share Price2022/08/05 00:00
Earnings2022/03/31
Annual Earnings2021/12/31


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.