Fact based stock research
Hong Leong Bank (KLSE:HLBANK)

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Hong Leong Bank stock research in summary

hlb.com.my

ANALYSIS: With an Obermatt Combined Rank of 7 (worse than 93% compared with investment alternatives), Hong Leong Bank (Diversified Banks, Malaysia) shares have lower financial characteristics compared with similar stocks. Shares of Hong Leong Bank are low in value (priced high) with a consolidated Value Rank of 31 (worse than 69% of alternatives), show below-average growth (Growth Rank of 35), and are riskily financed (Safety Rank of 31), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 7, is a sell recommendation based on Hong Leong Bank's financial characteristics. As the company Hong Leong Bank's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 31), low growth (Obermatt Growth Rank of 35), and risky financing practices (Obermatt Safety Rank of 31), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	31
Growth Rank	35
Safety Rank	31
Combined Rank	7

Country	Malaysia
Industry	Diversified Banks
Index	Independent Boards Growth Markets
Size class	Medium

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Hong Leong Bank

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	15	29	23	31
GROWTH
GROWTH	18	37	11	35
SAFETY
SAFETY	52	43	23	31
SENTIMENT
SENTIMENT	n/a	45	61	^new
360° VIEW
360° VIEW	n/a	9	3	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Hong Leong Bank is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	15	29	23	31
GROWTH
GROWTH	18	37	11	35
SAFETY
SAFETY	52	43	23	31
COMBINED
COMBINED	28	13	1	7

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Hong Leong Bank the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 31 (worse than 69% compared with alternatives), Hong Leong Bank shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for Hong Leong Bank. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 57, which means that the stock price is lower compared with invested capital than for 57% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 12 which means the stock price compared with what market professionals expect for future profits is higher than 88% of comparable companies, indicating a low value concerning Hong Leong Bank's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 57 and for the dividend yields rank which is lower than for 61% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 31, is a hold recommendation based on Hong Leong Bank's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Hong Leong Bank, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	4	13	7	12
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	28	29	36	46
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	42	42	56	57
DIVIDEND YIELD
DIVIDEND YIELD	24	43	36	39
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	15	29	23	31

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Hong Leong Bank; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 35 (better than 35% compared with alternatives), Hong Leong Bank shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Hong Leong Bank. Only Capital Growth has a good rank of 79, which means that currently professionals expect the company to grow its invested capital more than 40% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 23 which means that currently professionals expect the company to grow less than 77% of its competitors. Profit Growth with a rank of 40 and Stock Returns with a rank of 39 are also low (below 61% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 35, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Hong Leong Bank is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	20	20	41	23
PROFIT GROWTH
PROFIT GROWTH	9	20	32	40
CAPITAL GROWTH
CAPITAL GROWTH	n/a	73	25	79
STOCK RETURNS
STOCK RETURNS	30	53	25	39
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	18	37	11	35

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Hong Leong Bank.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 31 (better than 31% compared with alternatives), the company Hong Leong Bank has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Hong Leong Bank is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Hong Leong Bank. Liquidity is at 44, meaning that the company generates less profit to service its debt than 56% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 48, meaning the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. Finally, Refinancing is at a rank of 45 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 55% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 31 (worse than 69% compared with alternatives), Hong Leong Bank has a financing structure that is riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Hong Leong Bank because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	58	40	46	48
REFINANCING
REFINANCING	14	88	43	45
LIQUIDITY
LIQUIDITY	64	18	31	44
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	52	43	23	31

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Hong Leong Bank and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	76	44	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	44	31	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	15	73	^new
MARKET PULSE
MARKET PULSE	n/a	70	68	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	45	61	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Hong Leong Bank.
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