Bank of Chongqing (SEHK:1963) Faces A 72% Fair Value Gap On Strong Half Year Results

Bank of Chongqing (SEHK:1963) drew fresh attention after reporting half year 2026 results, with net interest income of CNY 7,388.98 million and net income of CNY 3,517.56 million compared to a year earlier.

At a share price of HK$8.33, Bank of Chongqing has had mixed recent momentum, with the share price return edging up 0.73% over one day but easing over the past month. However, the 1-year total shareholder return of 19.37% and very large 3 and 5 year total shareholder returns point to a much stronger longer term record.

Scan how Bank of Chongqing compares to other banks delivering stronger balance sheet quality and fundamentals with our curated list of solid balance sheet and fundamentals (431 results).

After Bank of Chongqing’s strong half year figures and a share price that has cooled slightly in recent weeks, the key issue for investors is whether the current valuation still leaves enough upside to justify the risks.

Price to Earnings of 4.6x: Is it justified?

On a P/E of 4.6x, Bank of Chongqing is valued below its peer group, while also trading at a discount to internal fair value estimates and the average Hong Kong banks sector multiple.

The P/E ratio compares the current HK$8.33 share price with the company’s earnings per share. For a bank like Bank of Chongqing, this gives a quick sense of how much investors are currently paying for each unit of earnings.

According to Simply Wall St’s model, Bank of Chongqing is trading at good value relative to peers in the Hong Kong Banks industry and compared to the internal fair P/E estimate of 6.7x. The stock is also assessed as undervalued when compared with a peer average P/E of 4.9x and is trading at around 72.1% below an internal estimate of future cash flow value of HK$29.88 per share.

This combination of a P/E below the industry average of 5.3x and below the estimated fair P/E of 6.7x suggests scope for the valuation multiple to move closer to those benchmarks if earnings and cash flow forecasts are met over time.

Explore the SWS fair ratio for Bank of Chongqing

Result: Price-to-earnings of 4.6x (UNDERVALUED)

However, investors still need to weigh risks such as revenue growth of 22.04% potentially slowing and any shift in credit quality across Bank of Chongqing’s China-focused loan book.

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

Another view on Bank of Chongqing’s value

The SWS DCF model presents a stronger perspective on Bank of Chongqing. At HK$8.33, the stock is compared with an internal future cash flow value estimate of HK$29.88. This suggests the current price is well below this figure and raises a clear question: Is the discount a genuine opportunity or a sign that risks are underappreciated?

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 261 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

If this mix of potential risks and rewards around Bank of Chongqing feels finely balanced, consider acting promptly and reviewing the data yourself to form a clear view. To see both sides presented together, review the 4 key rewards and 1 important warning sign

Looking for more investment ideas beyond Bank of Chongqing?

If you are reassessing Bank of Chongqing after these results, it often pays to widen the lens and compare other opportunities that fit your risk and return preferences.

• Target potential upside in companies priced below what their fundamentals suggest by scanning the 261 high quality undervalued stocks.
• Strengthen your income stream with stocks that combine higher yields with resilience using the 412 dividend fortresses.
• Reduce portfolio stress by focusing on businesses with steadier profiles through the 298 resilient stocks with low risk scores.

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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