Fact based stock research
Hong Leong Bank (KLSE:HLBANK)
MYL5819OO007
How to read the ranks
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
ANALYSIS: With an Obermatt Combined Rank of 1 (worse than 99% 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 25 (worse than 75% of alternatives), show below-average growth (Growth Rank of 29), and are riskily financed (Safety Rank of 16), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 1, 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 25), low growth (Obermatt Growth Rank of 29), and risky financing practices (Obermatt Safety Rank of 16), 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
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360° Viewnew| Country | Malaysia |
| Industry | Diversified Banks |
| Index | Independent Boards Growth Markets |
| Size class | XX-Large |
21-Mar-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
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.
It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.
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 |
|
25 |
|
| GROWTH | ||||||||
| GROWTH | 18 |
|
37 |
|
11 |
|
29 |
|
| SAFETY | ||||||||
| SAFETY | 52 |
|
43 |
|
23 |
|
16 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
45 |
|
61 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
9 |
|
3 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 1 (worse than 99% 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 25 (worse than 75% of alternatives), show below-average growth (Growth Rank of 29), and are riskily financed (Safety Rank of 16), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 1, 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 25), low growth (Obermatt Growth Rank of 29), and risky financing practices (Obermatt Safety Rank of 16), 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
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 15 |
|
29 |
|
23 |
|
25 |
|
| GROWTH | ||||||||
| GROWTH | 18 |
|
37 |
|
11 |
|
29 |
|
| SAFETY | ||||||||
| SAFETY | 52 |
|
43 |
|
23 |
|
16 |
|
| COMBINED | ||||||||
| COMBINED | 28 |
|
13 |
|
1 |
|
1 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 25 (worse than 75% 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 52, which means that the stock price is lower compared with invested capital than for 52% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 9 which means the stock price compared with what market professionals expect for future profits is higher than 91% 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 52 and for the dividend yields rank which is lower than for 62% 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 25, 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 |
|
9 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 28 |
|
29 |
|
36 |
|
36 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 42 |
|
42 |
|
56 |
|
52 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 24 |
|
43 |
|
36 |
|
38 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 15 |
|
29 |
|
23 |
|
25 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% 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 all four metrics below average for Hong Leong Bank. Sales Growth has a rank of 46, which means that currently professionals expect the company to grow less than 54% of its competitors. The same is valid for Profit Growth, with a rank of 31, and Capital Growth with 45. In addition, Stock Returns have a below market rank of 25, which means that the stock returns have recently been below 75% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. 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 low here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 20 |
|
20 |
|
41 |
|
46 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 9 |
|
20 |
|
32 |
|
31 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
73 |
|
25 |
|
45 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 30 |
|
53 |
|
25 |
|
25 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 18 |
|
37 |
|
11 |
|
29 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 16 (better than 16% compared with alternatives), the company Hong Leong Bank has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly 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 14, meaning that the company generates less profit to service its debt than 86% 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 38, meaning the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. Finally, Refinancing is at a rank of 46 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 54% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 16 (worse than 84% compared with alternatives), Hong Leong Bank has a financing structure that is significantly 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 |
|
38 |
|
| REFINANCING | ||||||||
| REFINANCING | 14 |
|
88 |
|
43 |
|
46 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 64 |
|
18 |
|
31 |
|
14 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 52 |
|
43 |
|
23 |
|
16 |
|
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 |
|
Stock analysis by the purely fact based Obermatt Method for Hong Leong Bank from March 21, 2024.
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