I
recently added two positions of Bank of China Ltd. listed in Hong Kong stock
exchange (ticker symbol 3988.HK). This stock can be bought in lots, so you can
buy stocks in multiples of 1000s. Friday closing price was HKD 3.39. Though I
first purchased it at 3.57 and then last week at 3.42, owning two lots now.
Currently
trading at a 5-year lowest price-earnings ratio, this market leader (Market Cap
900 billion HKD) is available at a discount and a bank to consider investing in if you
want to be part of the china story. It is also a dividend payer with a yield of
6.54% and a 5-year dividend growth rate of 12.79%, bringing the Chowder number
to 19. With payout ratio of mere 30%, and price-to-cashflow of 4.17, there is
easily room for this to grow over the coming years. It has exhibited very
strong growth over the past 5 years with Sales growing 14.10% and EPS growing
at 17.87%! ROE is at 18.50% as well. Further, the dividends could increase if
CNY continues to appreciate.
All
the financials are looking rock solid for the bank while it is attractively valued
with a lot of upside. I bought two lots as I wanted to add exposure to financial
sector (I did not own any financial stocks till now). This gives me geographical
diversification as well.
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