Bank of East Asia (0023) AI Stock Analysis

• Market Cap: HK$35.95B
• Dividend Yield: 5.78%
• Average Volume (3M): 1.57M
• Price to Earnings (P/E): 8.0
• Beta (1Y): 0.50
• Revenue Growth: -7.68%
• EPS Growth: 49.57%
• Country: HK
• Employees: 7,880
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.86
• Shares Outstanding: 2,641,430,200
• 10 Day Avg. Volume: 1,920,882
• 30 Day Avg. Volume: 1,573,521
• PEG Ratio: 0.37
• Price to Book (P/B): 0.25
• Price to Sales (P/S): 1.69
• P/FCF Ratio: -3.14
• 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: HK$15.30
• Price Target Upside: 15.38% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: HK$14.50 ▲(9.35% Upside)

The score is driven primarily by mixed financial quality—solid profitability and improving leverage but meaningfully weakened by back-to-back negative operating/free cash flow—while valuation is a clear positive (low P/E and high yield). Technicals are neutral, indicating limited near-term trend support.

Positive Factors

Improved Leverage

The improvement in leverage indicates better financial stability and reduced risk, enhancing the bank's ability to manage its liabilities and invest in growth opportunities.

Revenue Growth Re-acceleration

The re-acceleration of revenue growth suggests a recovery in business operations and market demand, potentially leading to stronger financial performance in the future.

Enhanced Governance

Enhancing governance through updated committee terms strengthens transparency and accountability, which can improve stakeholder trust and regulatory compliance.

Negative Factors

Weak Cash Generation

Consistent negative cash flow indicates potential liquidity issues and challenges in sustaining operations without external financing, impacting long-term financial health.

Volatile Operating Profitability

Volatile profitability can lead to unpredictable financial performance, making it difficult to plan for long-term investments and growth strategies.

Moderate Returns on Equity

Moderate returns on equity suggest limited profitability relative to the asset base, which may hinder the bank's ability to generate competitive shareholder returns.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.64B	15.43B	14.54B	29.70B	23.86B	27.34B
Gross Profit	15.64B	15.43B	44.25B	17.27B	15.82B	27.34B
EBITDA	6.70B	0.00	6.13B	5.82B	7.11B	4.42B
Net Income	4.90B	4.61B	4.12B	4.36B	5.27B	3.61B
Balance Sheet
Total Assets	891.42B	877.76B	860.36B	882.83B	907.47B	884.42B
Cash, Cash Equivalents and Short-Term Investments	0.00	41.30B	89.59B	112.15B	120.64B	113.68B
Total Debt	10.97B	53.42B	53.37B	51.16B	58.95B	61.41B
Total Liabilities	781.68B	772.02B	752.03B	786.57B	805.39B	784.59B
Stockholders Equity	109.46B	105.46B	97.97B	95.99B	101.78B	98.89B
Cash Flow
Free Cash Flow	-10.87B	-8.28B	-17.60B	9.86B	1.71B	13.91B
Operating Cash Flow	-10.46B	-7.74B	-16.92B	10.41B	2.32B	14.51B
Investing Cash Flow	-20.07B	-318.00M	-511.00M	2.13B	2.67B	368.00M
Financing Cash Flow	-6.57B	4.94B	-1.74B	-31.28B	41.78B	4.06B

Bank of East Asia Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.26
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 13.26 is below the 20-day moving average (MA) of 13.36, below the 50-day MA of 13.38, and above the 200-day MA of 12.07, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 58.96 is Neutral, neither overbought nor oversold. The STOCH value of 71.00 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	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
3866	67 Neutral	HK$26.25B	5.11	―	4.45%	4.33%	17.13%
2356	67 Neutral	HK$15.01B	6.69	6.58%	6.54%	―	―
1963	67 Neutral	HK$34.32B	4.46	9.11%	5.69%	5.30%	9.05%
0023	66 Neutral	HK$35.95B	8.03	4.41%	5.78%	-7.68%	49.57%
3698	62 Neutral	HK$45.98B	2.84	11.00%	7.06%	-0.12%	3.42%
1551	53 Neutral	HK$21.87B	12.26	―	3.20%	-3.87%	22.34%

Bank of East Asia Corporate Events

Bank of East Asia Updates Audit Committee Terms for Enhanced Governance

The Bank of East Asia has updated the terms of reference for its Audit Committee, which was established to ensure an independent review of the bank’s financial reporting, risk management, and internal control systems. This update aligns with the Corporate Governance Code and the Listing Rules, enhancing the bank’s commitment to transparency and accountability, which is crucial for maintaining stakeholder trust and regulatory compliance.

The most recent analyst rating on (HK:0023) stock is a Buy with a HK$15.30 price target. To see the full list of analyst forecasts on Bank of East Asia stock, see the HK:0023 Stock Forecast page.

Bank of East Asia Forms Nomination Committee to Enhance Board Diversity and Oversight

The Bank of East Asia has established a Nomination Committee to oversee the appointment, removal, and succession planning of senior management and directors. This move aims to enhance the diversity and effectiveness of the Board, with a majority of the committee members being Independent Non-executive Directors, ensuring independent oversight.

The most recent analyst rating on (HK:0023) stock is a Buy with a HK$15.30 price target. To see the full list of analyst forecasts on Bank of East Asia stock, see the HK:0023 Stock Forecast page.

Bank of East Asia Forms Remuneration Committee for Enhanced Governance

The Bank of East Asia has established a Remuneration Committee to oversee and review the remuneration policies and packages for its Directors, Senior Management, and Key Personnel. This move is aimed at ensuring effective governance and alignment with industry standards, potentially impacting the bank’s operational efficiency and stakeholder confidence.

The most recent analyst rating on (HK:0023) stock is a Buy with a HK$15.30 price target. To see the full list of analyst forecasts on Bank of East Asia stock, see the HK:0023 Stock Forecast page.

BEA Enters Framework Agreement with SMBC for Financial Transactions

The Bank of East Asia (BEA) has entered into a Framework Agreement with Sumitomo Mitsui Banking Corporation (SMBC) to facilitate Spot Transactions and Derivative Contracts between the two groups. This agreement, effective from October 10, 2025, to December 31, 2027, outlines the terms for transactions that will be negotiated on an arm’s length basis and comply with market conditions. As SMBC is a substantial shareholder of BEA, the transactions are considered continuing connected transactions under Hong Kong’s Listing Rules. The agreement is subject to reporting and annual review requirements but is exempt from independent shareholders’ approval.

The most recent analyst rating on (HK:0023) stock is a Sell with a HK$11.80 price target. To see the full list of analyst forecasts on Bank of East Asia stock, see the HK:0023 Stock Forecast page.