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HK Equities · Finance research note

HKEX 3328 - Bank of Communications Co., Ltd. - H Shares

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Evidence and analysis

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2. Company Fundamentals

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 11.59%
Risk / Std Dev (Ann.)* 18.55%
1-Year Price Return* 9.37%

Latest Market Data (as of 2026-08-14, Hong Kong time):

Metric Value
Last Price HK$7.245
52-Week Range HK$6.33 – HK$7.83
Observation Count 245 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year price series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in HK$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue HK$263.62B HK$258.43B
Net income Reported net income HK$95.62B HK$93.59B
Total assets Year-end reported balance HK$15,548.39B HK$14,900.72B
Shareholders’ equity Year-end reported balance HK$1,269.23B HK$1,144.31B
Net margin Net income ÷ revenue 36.27% 36.21%
Asset turnover Revenue ÷ total assets 0.0170x 0.0173x
Equity multiplier Total assets ÷ shareholders’ equity 12.2502x 13.0216x
ROE Net margin × asset turnover × equity multiplier 7.53% 8.18%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

FCFF DCF exception: FCFF DCF is not the primary valuation method for financial institutions or REITs. This post deliberately does not publish a mechanical enterprise value or implied per-share value on an unsuitable basis.

Available valuation input Value
Last market price HK$7.34
Market capitalisation HK$649.03B
Revenue HK$263.62B
EBIT NM
Reported free cash flow HK$89.24B
FCF yield 13.75%
Net debt / EBITDA NM

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks not rated — FCFF DCF suitability or data-integrity condition not met
Lynch-inspired balance-and-growth checks not rated — FCFF DCF suitability or data-integrity condition not met

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:05:53.629522 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Financial institutions and REITs require sector-specific methods rather than a mechanical FCFF DCF. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set Asia Pacific ex Japan
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-20 to 2026-06-30
Aligned daily observations 210
Minimum observation requirement 120
Currency conversion for HK listings HKD adjusted close divided by daily USD/HKD close before simple daily return calculation

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha -12.06% -11.90%
Adjusted R² 0.21 0.20
Annualised residual volatility 15.72% 15.72%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 0.59 (6.53) 0.59 (6.05)
Size (SMB) -0.19 (-1.42) -0.19 (-1.14)
Value (HML) 0.67 (5.36) 0.65 (4.72)
Profitability (RMW) NM -0.03 (-0.19)
Investment (CMA) NM 0.01 (0.03)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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