Bank of Chongqing (SEHK:1963) Could Be 73% Undervalued As Dividend Approval Draws Focus

Bank of Chongqing (SEHK:1963) has drawn fresh attention after shareholders approved a final dividend of RMB 0.2797 per share for 2025 at the 23 June 2026 AGM, highlighting the stock’s income profile.

See our latest analysis for Bank of Chongqing.

The final dividend decision comes as Bank of Chongqing’s HK$7.47 share price has slipped over the last month, with a 30 day share price return of a 13.94% decline, while the 5 year total shareholder return of 130.98% points to a much stronger longer term outcome.

If this dividend story has you thinking about income and resilience, it can be useful to see how other financial stocks stack up on quality and durability, including those with a 106 top founder-led companies.

After the recent share price slide, Bank of Chongqing now trades at a steep discount to both analyst targets and some intrinsic value estimates. Is the market being prudently cautious, or marking the stock down too far?

Price to Earnings of 4.3x: Is it justified?

With Bank of Chongqing last closing at HK$7.47, the stock is trading on a P/E of 4.3x, which screens as inexpensive compared to both peers and the wider Hong Kong banks industry.

The P/E ratio compares the current share price with earnings per share, so for a bank like Bank of Chongqing it is a quick way to see how much investors are paying for each unit of current earnings.

Here that 4.3x P/E sits below the peer average of 5x and the Hong Kong banks industry average of 5.5x. This suggests the market is not paying as much for Bank of Chongqing’s earnings as it is for similar banks. Relative to an estimated fair P/E of 5.9x, the current multiple is also lower. This points to a level the valuation could move toward if sentiment and earnings expectations line up with that fair ratio view.

Explore the SWS fair ratio for Bank of Chongqing

Result: Price-to-earnings of 4.3x (UNDERVALUED)

However, Bank of Chongqing’s recent 7.6% one-year total return decline and the 5.8% year-to-date fall in the share price show that sentiment can quickly reset the story.

Find out about the key risks to this Bank of Chongqing narrative.

Another View: Our DCF model points to a very different fair value

The low 4.3x P/E makes Bank of Chongqing look inexpensive, but the SWS DCF model goes much further, with an estimated fair value of HK$28.03 per share versus the current HK$7.47, implying the stock trades at a 73.3% discount. Is the DCF being too generous, or is the market too harsh?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Bank of Chongqing for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 211 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Does this mix of potential upside and flagged concerns leave you unsure about Bank of Chongqing? Consider reviewing the figures in detail, and weigh both sides by checking the 4 key rewards and 1 important warning sign.

Looking for more investment ideas beyond Bank of Chongqing?

If Bank of Chongqing has sharpened your focus on value and income, you do not need to stop here. The right screener can help you quickly find other opportunities that fit your style.

• Spot underpriced opportunities early and see which companies currently stand out as potential value ideas through the 211 high quality undervalued stocks.
• Strengthen your income stream by reviewing stocks that feature resilient payouts and higher yields using the 475 dividend fortresses.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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