Bank of East Asia (0023) AI Stock Analysis

• Market Cap: $32.59B
• Dividend Yield: 6.15%
• Average Volume (3M): 1.90M
• Price to Earnings (P/E): 8.1
• Beta (1Y): 0.56
• Revenue Growth: 1.77%
• EPS Growth: 15.22%
• Country: HK
• Employees: 7,880
• Sector: Financial
• Sector Strength: 75
• Industry: Banks - Regional
• EPS (TTM): 0.83
• Shares Outstanding: 2,636,471,200
• 10 Day Avg. Volume: 1,237,287
• 30 Day Avg. Volume: 1,901,527
• PEG Ratio: 0.22
• Price to Book (P/B): 0.31
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -3.95
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $12.01
• Price Target Upside: -2.52% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 63 Neutral
• Price Target: ―

The Bank of East Asia's overall stock score reflects a solid financial position with strong profit margins and attractive valuation metrics. However, the score is moderated by challenges in cash flow management and a neutral technical outlook. While the low P/E ratio and high dividend yield are strong positives, the stock's current trading patterns suggest caution in the short term.

Bank of East Asia Business Overview & Revenue Model

Company Description

The Bank of East Asia, Limited, together with its subsidiaries, provides various banking and related financial services. Its personal banking services include corporate, individual, savings, current, time deposit, and supreme accounts; and fixed and call deposits, foreign currency deposits, MAS services, and auto-payroll products, as well as safe deposit boxes and remittance services. The company also provides corporate banking services, such as SME loans and financing guarantee schemes; corporate and commercial financing products, including syndicated and construction loans, acquisition and structured financing, working capital financing, share financing and IPO-related loans, and commercial mortgages; trade finance services and expert trade solutions; factoring services; import and export trade finance; guarantee services; eTradeConnect that allows buyers and sellers to connect, transact, share information, and submit applications for financing through a single platform; cash management services; corporate wealth management products; foreign exchange and treasury products; trade settlement and financing services; onshore and offshore loans; and marine cargo, property, trade credit, employee compensation, pet, medical, life, savings, and endowment insurance plans. In addition, it offers private banking services comprising investment advisory services; investment solutions, such as unit trusts, linked deposits, currency trading and management, global equities and bonds investments, structured products, and options and derivatives; portfolio management services; securities and futures broking services; cyber banking, credit cards, and ATM; and various international services. The company operates 150 outlets in Hong Kong, rest of Greater China, Southeast Asia, the United Kingdom, and the United States. The Bank of East Asia, Limited was incorporated in 1918 and is headquartered in Central, Hong Kong.

How the Company Makes Money

The Bank of East Asia makes money primarily through interest income derived from its lending activities, including personal loans, mortgages, and corporate loans. Additional revenue streams include fees and commissions earned from wealth management services, credit card services, trade financing, and foreign exchange transactions. The bank also generates income from investment activities and securities trading. Strategic partnerships and joint ventures, particularly in Mainland China, enhance its revenue potential by expanding its reach and service offerings in key growth markets.

Bank of East Asia Financial Statement Overview

Summary

The Bank of East Asia shows strong operational efficiency with robust profit margins, yet faces challenges in cash flow management and revenue stability. The balance sheet remains healthy with controlled leverage, but caution is advised due to recent cash flow trends. Overall, the bank maintains a stable financial position with some areas needing improvement.

Income Statement

The Bank of East Asia demonstrates stable profitability with a consistent gross profit margin and a net profit margin around 30% in recent years. Revenue growth shows volatility, with a notable decline in 2024 compared to the previous year. However, EBIT margin remains healthy above 40%, reflecting operational efficiency. Earnings growth remains a concern due to fluctuating revenue.

Balance Sheet

The balance sheet is solid, with a moderate debt-to-equity ratio of around 0.22 in 2024, indicating controlled leverage. The return on equity is satisfactory at approximately 4.37%, but equity ratio is relatively low at 12%, suggesting heavy reliance on liabilities. Good cash reserves bolster financial stability.

Cash Flow

Cash flow from operations is negative, raising concerns about cash management. While the bank has a history of generating positive free cash flow, recent figures point to a significant decline. The operating cash flow to net income ratio indicates challenges in converting earnings into cash flow.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.43B	14.54B	29.70B	23.86B	27.34B
Gross Profit	15.43B	44.25B	29.70B	23.86B	27.34B
EBITDA	0.00	6.13B	5.82B	0.00	0.00
Net Income	4.61B	4.12B	4.36B	5.27B	2.82B
Balance Sheet
Total Assets	877.76B	860.36B	882.83B	907.47B	884.42B
Cash, Cash Equivalents and Short-Term Investments	41.30B	91.47B	112.15B	120.64B	113.68B
Total Debt	23.48B	52.52B	51.16B	58.95B	61.41B
Total Liabilities	772.02B	752.03B	786.57B	805.39B	784.59B
Stockholders Equity	105.46B	97.97B	95.99B	101.78B	98.89B
Cash Flow
Free Cash Flow	-8.28B	-17.60B	9.86B	1.71B	13.91B
Operating Cash Flow	-7.74B	-16.92B	10.41B	2.32B	14.51B
Investing Cash Flow	-318.00M	-511.00M	3.17B	-42.20B	-5.67B
Financing Cash Flow	4.94B	-1.74B	-30.04B	43.10B	5.53B

Bank of East Asia Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12.32
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0023, the sentiment is Positive. The current price of 12.32 is above the 20-day moving average (MA) of 12.19, above the 50-day MA of 11.62, and above the 200-day MA of 10.47, indicating a bullish trend. The MACD of 0.24 indicates Positive momentum. The RSI at 59.68 is Neutral, neither overbought nor oversold. The STOCH value of 58.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0023.

Bank of East Asia Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$16.73B	11.75	9.79%	3.76%	11.87%	-7.97%
0023	63 Neutral	$32.59B	8.10	4.04%	6.15%	1.77%	15.22%
2356	―	HK$13.82B	6.62	6.23%	7.93%	―	―
HHSSF	―	$6.18B	3.00	9.68%	6.59%	―	―
4BQ	―	€3.23B	5.28	11.99%	3.92%	―	―
CQN	―	€3.96B	4.38	9.23%	12.37%	―	―
2GN	―		―		―	―	―

Bank of East Asia Corporate Events

Bank of East Asia Grants Over 8 Million Share Options with Performance Conditions

The Bank of East Asia announced the grant of 8,702,317 share options under its Staff Share Option Scheme to eligible persons. These options, exercisable in three tranches between 2026 and 2033, are subject to performance and risk conditions. The bank has implemented a clawback mechanism to address any potential issues of misstatement or misconduct, ensuring alignment with its remuneration policy.

Bank of East Asia Announces 106th Annual General Meeting

The Bank of East Asia has announced its 106th Annual General Meeting scheduled for May 9, 2025, at the Four Seasons Hotel in Hong Kong. Key agenda items include the receipt of the audited financial statements for 2024, reappointment of KPMG as auditors, and re-election of several directors. Additionally, the meeting will consider granting a mandate to the bank’s directors to issue additional shares, which could impact the bank’s capital structure and shareholder value.

Bank of East Asia Delays AGM Circular Dispatch

The Bank of East Asia has announced a delay in the dispatch of its AGM circular, initially expected in March 2025, to on or before 15 April 2025. This postponement is due to the need for additional time to finalize certain information related to the Framework Agreement and Continuing Connected Transactions, which may impact shareholder decisions and the bank’s operational timelines.

Bank of East Asia Declares Second Interim Dividend with Scrip Option

The Bank of East Asia, Limited announced a second interim cash dividend of HKD 0.38 per share for the financial year ending December 31, 2024, with a scrip option allowing shareholders to convert their dividends into shares at a price of HKD 11.732 per share. This announcement reflects the bank’s ongoing commitment to providing shareholder returns and may impact its market positioning by offering flexible dividend options, potentially enhancing shareholder value and engagement.

Bank of East Asia Proposes Amendments to Articles of Association

The Bank of East Asia has announced proposed amendments to its Articles of Association, aligning with recent legal and regulatory changes concerning treasury shares and shareholder communication. These changes are contingent upon approval at the upcoming Annual General Meeting in May 2025, highlighting the bank’s effort to stay compliant and enhance corporate governance practices.

Bank of East Asia Reports Increased Profits for 2024

The Bank of East Asia announced its audited financial results for the year ending December 31, 2024, reporting a net profit of HK$4,629 million, a notable increase from HK$4,136 million in the previous year. The bank’s consistent accounting policies facilitated this growth, bolstered by increases in both interest income and non-interest income, despite facing challenges such as impairment losses and valuation losses on investment properties. This financial performance reflects the bank’s resilient market positioning and operational efficiency, potentially benefiting stakeholders by enhancing shareholder value and establishing a stronger competitive edge in the banking industry.

Bank of East Asia Announces Second Interim Dividend with Scrip Option

The Bank of East Asia, Limited announced a second interim cash dividend of HKD 0.38 per share for the year ending December 31, 2024, with a scrip option available to shareholders. This strategic move reflects the company’s solid financial performance and aims to enhance shareholder value while providing flexibility in dividend payments.