Morningstar

BOC Hong Kong Holdings Ltd 02388

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Stock XHKG Rating as of
HK$25.00 +0.40 (1.63%)
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As of Delayed Price Closed

Company Report

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BOC Hong Kong Earnings: Strong Cost Efficiency Boosts First-Half Result; Asset Quality Resilient

Lorraine Tan

We maintain our fair value estimate for Bank of China Hong Kong, or BOCHK, at HKD 33 per share, which is 1.05 times book value and nearly 40% above the current price, following the release of its interim results. In the first half of the year, BOCHK's annualized return on equity was 12.4%, the highest six-month ROE since before the pandemic. This performance exceeds our estimate of BOCHK's cost of equity but remains below the average ROE of 13.5% seen in the 2010s.

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Price vs Fair Value

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02388 is trading at a 585% premium.
Price
HK$25.00
Fair Value
HK$45.00
Uncertainty
Medium
1-Star Price
HK$61.31
5-Star Price
HK$23.90
Economic Moat
Xxpltm
Capital Allocation
Xfvxnlbxh

Bulls Say, Bears Say

Bulls

BOCHK benefits from a strong connection with parent Bank of China, underpinning steady loan growth as BOCHK offers cross-border banking expertise to Chinese corporates seeking offshore investments.

Bears

BOCHK's credit quality and profitability may deteriorate if the Chinese and regional economies experience a sharp decline in economic activity.

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Trading Information

Previous Close Price
HK$24.60
Day Range
HK$24.50–25.10
52-Week Range
HK$17.86–26.10
Bid/Ask
HK$24.95 / HK$25.00
Market Cap
HK$264.32 Bil
Volume/Avg
33.2 Mil / 10.2 Mil

Key Statistics

Price/Earnings (Normalized)
5.73
Price/Sales
3.67
Dividend Yield (Trailing)
6.86%
Dividend Yield (Forward)
6.86%
Total Yield
6.86%

Company Profile

Bank of China Hong Kong, or BOCHK, is a subsidiary of Bank of China. It is the second-largest bank in Hong Kong in terms of loan and deposit market shares. Although BOCHK is legally separate from Bank of China, it maintains close relationships with it in management, administration, and business relations. The two companies also cooperate in several areas, including the reselling of Bank of China's insurance and securities services. Bank of China holds a 66% stake in BOCHK.
Sector
Financial Services
Industry
Banks - Regional
Stock Style Box
Large Value
Total Number of Employees
14,910
Website
https://www.bochk.com

Competitors

Valuation

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Metric
02388
D05
O39
Price/Earnings (Normalized)
 5.739.429.25
Price/Book Value
 0.811.641.19
Price/Sales
 3.675.044.88
Price/Cash Flow
 4.678.548.46
Price/Earnings
02388
D05
O39

Financial Strength

Metric
02388
D05
O39
Quick Ratio
 ———
Current Ratio
 ———
Interest Coverage
 ———
Quick Ratio
No chart available

Profitability

Metric
02388
D05
O39
Return on Assets (Normalized)
 0.96%1.40%1.18%
Return on Equity (Normalized)
 11.46%17.28%12.82%
Return on Invested Capital (Normalized)
 ———
Return on Assets
02388
D05
O39

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