OCBC (O39) AI Stock Analysis

• Market Cap: $76.53B
• Dividend Yield: 5.27%
• Average Volume (3M): 4.95M
• Price to Earnings (P/E): 10.4
• Beta (1Y): 1.02
• Revenue Growth: 0.69%
• EPS Growth: -0.06%
• Country: SG
• Employees: 33,656
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.43
• Shares Outstanding: 4,514,995,600
• 10 Day Avg. Volume: 3,854,820
• 30 Day Avg. Volume: 4,954,879
• PEG Ratio: 1.29
• Price to Book (P/B): 1.28
• Price to Sales (P/S): 2.79
• P/FCF Ratio: 22.63
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 2.88
• Enterprise Value/Gross Profit: 3.75
• Enterprise Value/Ebitda: 4.78
• 1Y Price Target: $17.08
• Price Target Upside: -3.95% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: S$19.00 ▲(6.86% Upside)

OCBC's overall stock score is driven by its strong valuation metrics and positive technical indicators, which are offset by concerns over recent revenue declines and cash flow challenges. The attractive P/E ratio and high dividend yield enhance its appeal, while the technical analysis supports a bullish outlook.

Positive Factors

Capital Strengthening

Issuing Tier 2 notes enhances OCBC's capital base, improving financial stability and regulatory compliance, supporting long-term growth.

Profitability

Consistent profitability indicates effective cost management and operational efficiency, supporting sustainable business operations.

Market Presence

A diverse product offering and strong regional presence provide OCBC with a competitive edge and resilience against market fluctuations.

Negative Factors

Revenue Decline

A decline in revenue can impact future growth and profitability, necessitating strategic adjustments to maintain market competitiveness.

Cash Flow Challenges

Weak cash flow conversion can limit investment capacity and financial flexibility, affecting long-term strategic initiatives.

Leverage Increase

Increasing leverage could strain financial resources, impacting the bank's ability to respond to economic changes and opportunities.

OCBC Business Overview & Revenue Model

Company Description

Oversea-Chinese Banking Corporation Limited provides financial services in Singapore, Malaysia, Indonesia, Greater China, rest of the Asia Pacific, and internationally. The company's Global Consumer/Private Banking segment provides products and services to individual customers, including checking accounts, and savings and fixed deposits; housing and other personal loans; credit cards; wealth management products consisting of unit trusts, banc assurance products, and structured deposits; and brokerage services. This segment also offers investment advice and portfolio management, estate and trust planning, and wealth structuring services for high-net-worth individuals. Its Global Wholesale Banking segment provides project financing, short-term credit, working capital, and trade financing; customized and structured equity-linked financing products; cash management and custodian services; capital market solutions; corporate finance and advisory banking services; and treasury products. This segment serves corporates, public sector, and small and medium enterprises. The company's Global Treasury and Markets segment is involved in the foreign exchange activities, money market operations, and fixed income and derivatives trading, as well as provision of structured treasury products and financial solutions. Its Insurance segment provides fund management services, and life and general insurance products. The company's Others segment is involved in property and investment holding activities. The company operates approximately 430 branches and representative offices in 19 countries and regions. Oversea-Chinese Banking Corporation Limited was founded in 1912 and is headquartered in Singapore.

How the Company Makes Money

OCBC generates revenue through multiple streams, primarily from net interest income and non-interest income. Net interest income is derived from the interest earned on loans provided to customers, which includes personal loans, mortgages, and corporate financing, minus the interest paid on deposits and borrowings. Non-interest income comes from various sources such as fees and commissions from banking services, wealth management, insurance premiums, and trading income. Additionally, OCBC has established significant partnerships with other financial institutions and companies, enhancing its service offerings and expanding its customer base. The bank's strong focus on digital banking and innovation also plays a crucial role in attracting new clients and retaining existing ones, thus contributing to its overall earnings.

OCBC Financial Statement Overview

Summary

OCBC exhibits strong profitability and a solid balance sheet, with effective cost management and a healthy return on equity. However, recent revenue declines and cash flow challenges highlight areas for improvement. Continued focus on revenue growth and cash flow efficiency will be crucial for sustaining financial health.

Income Statement

OCBC has demonstrated strong profitability with a consistent net profit margin of around 28% in 2024, despite a revenue decline of 9.3%. The EBIT and EBITDA margins remain robust, indicating efficient operational management. However, the recent revenue contraction poses a concern for future growth.

Balance Sheet

The debt-to-equity ratio of 0.54 in 2024 suggests moderate leverage, which is manageable given the bank's strong equity base. Return on equity is healthy at 12.8%, reflecting effective use of shareholder funds. However, the slight increase in leverage over the years warrants monitoring.

Cash Flow

OCBC's cash flow performance has been mixed, with a significant decline in free cash flow growth in 2024. The operating cash flow to net income ratio is low, indicating potential challenges in converting income into cash. The free cash flow to net income ratio remains strong, suggesting good cash generation relative to profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	30.28B	27.16B	24.73B	15.58B	12.17B	8.10B
Gross Profit	23.26B	13.78B	12.77B	11.09B	9.72B	8.10B
EBITDA	18.27B	22.19B	19.84B	11.37B	7.77B	5.87B
Net Income	9.43B	7.59B	7.02B	5.75B	4.86B	3.59B
Balance Sheet
Total Assets	644.79B	625.05B	581.42B	559.96B	542.19B	521.39B
Cash, Cash Equivalents and Short-Term Investments	33.75B	57.28B	51.74B	61.65B	-7.65B	-7.44B
Total Debt	30.26B	31.79B	26.77B	22.63B	29.78B	35.42B
Total Liabilities	583.27B	566.37B	525.87B	505.29B	489.05B	471.42B
Stockholders Equity	60.45B	59.32B	52.92B	53.09B	51.47B	48.42B
Cash Flow
Free Cash Flow	16.35B	3.35B	8.59B	8.45B	13.84B	15.25B
Operating Cash Flow	17.02B	3.96B	9.13B	8.93B	10.80B	6.48B
Investing Cash Flow	-18.66B	-4.33B	-10.45B	-1.51B	-29.71B	-9.33B
Financing Cash Flow	13.67B	70.00M	355.00M	628.00M	20.02B	5.91B

OCBC Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 17.78
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:O39, the sentiment is Positive. The current price of 17.78 is above the 20-day moving average (MA) of 16.94, above the 50-day MA of 16.79, and above the 200-day MA of 16.25, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 82.35 is Negative, neither overbought nor oversold. The STOCH value of 79.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SG:O39.

OCBC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
S68	80 Outperform	$18.34B	28.29	30.82%	2.33%	11.28%	8.34%
D05	78 Outperform	$151.72B	13.47	17.10%	4.75%	2.67%	6.32%
G07	74 Outperform	S$7.60B	14.27	11.35%	3.15%	-0.39%	8.38%
O39	73 Outperform	$76.53B	10.41	12.87%	5.27%	0.69%	-0.06%
S41	72 Outperform	S$1.17B	13.99	4.02%	4.87%	-10.51%	-15.79%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
U11	65 Neutral	$57.77B	9.76	12.80%	6.70%	-0.76%	4.96%

OCBC Corporate Events

OCBC Prices US$1 Billion Tier 2 Subordinated Notes to Strengthen Capital Base

OCBC has successfully priced US$1 billion of Tier 2 subordinated notes under its US$30 billion Global Medium Term Note Programme. The proceeds will be used for general corporate purposes and the notes are expected to qualify as Tier 2 capital under the Monetary Authority of Singapore’s requirements. The notes, bearing a coupon of 4.55% per annum, are set to be issued on 8 September 2025 and listed on the Singapore Exchange. This strategic move is expected to enhance OCBC’s capital structure and strengthen its financial position, potentially impacting its market standing and stakeholder interests.