Morningstar

Bank Of China Ltd Class H 03988

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Stock XHKG Rating as of
HK$3.86 +0.05 (1.31%)
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As of Delayed Price Closed

Company Report

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China SOE Banks Earnings: Large Banks Lag Smaller Banks in NIM Recovery

Iris Tan

We maintain our fair value estimates for the state-owned enterprise banks in our coverage except for Agricultural Bank of China, which is seeing higher-than-expected net interest margins. We now increase ABC’s NIM assumption by 5 and 2 basis points in 2024 and 2025, respectively, which leads to a rise in fair value estimate to HKD 3.80 from HKD 3.50. Overall, there are no changes to our outlook for the other SOE banks.

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Price vs Fair Value

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03988 is trading within a range we consider fairly valued.
Price
HK$3.86
Fair Value
HK$9.90
Uncertainty
Medium
1-Star Price
HK$1.49
5-Star Price
HK$9.51
Economic Moat
Zsqc
Capital Allocation
Zjqxntcp

Bulls Say, Bears Say

Bulls

We believe the average BOC customer is wealthier than the customer at one of its Big Four peers as total assets managed by BOC’s private bank accounted for roughly 20% of the bank’s retail AUM.

Bears

BOC's net interest margin will face rising downward pressure along with the reversal of the Fed's upward interest rate cycle.

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News

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Trading Information

Previous Close Price
HK$3.81
Day Range
HK$3.75–3.88
52-Week Range
HK$2.67–3.99
Bid/Ask
HK$3.85 / HK$3.86
Market Cap
HK$1.14 Tril
Volume/Avg
338.8 Mil / 263.4 Mil

Key Statistics

Price/Earnings (Normalized)
4.86
Price/Sales
1.81
Dividend Yield (Trailing)
6.71%
Dividend Yield (Forward)
6.71%
Total Yield
6.71%

Company Profile

Bank of China was founded in 1912 with its headquarters in Beijing. The bank has evolved as a central bank, international exchange bank, and state-owned bank specializing in foreign trade business. BOC was listed on the Hong Kong and Shanghai stock exchanges in 2006. It provides a comprehensive range of financial services to customers across Greater China and overseas. Central Huijin, a Chinese state-owned investment company and BOC's largest shareholder, controls 64%. BOC has the most extensive global reach among Chinese banks, with operations in 64 countries and regions.
Sector
Financial Services
Industry
Banks - Diversified
Stock Style Box
Large Value
Total Number of Employees
308,703
Website
https://www.boc.cn

Competitors

Valuation

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Metric
03988
601288
601939
Price/Earnings (Normalized)
 4.867.196.21
Price/Book Value
 0.460.680.65
Price/Sales
 1.812.612.66
Price/Cash Flow
 5.0211.819.68
Price/Earnings
03988
601288
601939

Financial Strength

Metric
03988
601288
601939
Quick Ratio
 ———
Current Ratio
 ———
Interest Coverage
 ———
Quick Ratio
No chart available

Profitability

Metric
03988
601288
601939
Return on Assets (Normalized)
 0.71%0.66%0.85%
Return on Equity (Normalized)
 10.36%11.13%11.26%
Return on Invested Capital (Normalized)
 ———
Return on Assets
03988
601288
601939

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