$STANCHART(02888)$ A Value Buy at HKD 70, Now at HKD 115—Is There More Upside?

Decide to do a more detail post on this due to reasonses and feedback. DYOR and my personal opinion and not financial advice. 

My Decision to Buy at around HKD 70 region.

In July 2023, I decided to buy Standard Chartered (2888.HK) at HKD 70, based on value investing principles and historical price trends. My conviction was that the stock was undervalued relative to its intrinsic worth, and recent developments in its business model signaled future growth potential.

Fast forward to today, Standard Chartered is trading at HKD 115, marking a +64% gain from my entry point. The key question now is: Does this rally still have legs, or is it time to take profits?

Valuation: Still a Value Play?

In my opinion and strategy. It was then a hodl stack me. I do wonder if I should DCA up, but *do your own research and adjust your risk appetite and definitely not financial advice’. As I am trying to build a passive value earning portfolio so I have the option to work lesser days or turn part time for work, to have better work life balance.

Standard Chartered remains attractive from a valuation standpoint. The stock’s Price-to-Book (P/B) ratio is still below many of its global banking peers though hmmm, indicating potential room for further re-rating but how much we don’t know.

Key Fundamentals at a Glance:

✅ Dividend Yield: The stock continues to provide a solid dividend income stream, making it a strong pick for long-term holders

✅ Rising Interest Rates: Banks benefit from higher interest rate environments, improving net interest margins (NIMs)

✅ Earnings Growth: Recent earnings reports have shown strong performance, reinforcing confidence in the company’s trajectory

Technical Analysis: Is There More Upside?

Pure Technical Levels wise and what to look out for ……

📈 Potential Resistance at HKD 120-125 – The stock is approaching a multi-year resistance zone, which could trigger some selling pressure

📉 Potential Support at HKD 100-105 – If a pullback happens, this level will be crucial to watch for potential re-entry opportunities

📊 50-Day & 200-Day Moving Averages – Standard Chartered is trading well above both moving averages, signaling a strong uptrend but also indicating that it might be overextended in the short term

Momentum Indicators:

🔹 RSI (Relative Strength Index): Currently in the overbought territory, suggesting a potential short-term correction - so there might be chance to DCA during correction?

🔹 MACD (Moving Average Convergence Divergence): Still bullish, indicating strong momentum in the uptrend - but dangerous too as it has gone up quite a bit.

Strategic ‘Side business’ Expansion:

The NTUC Joint Venture - Trust bank

Beyond technicals, Standard Chartered’s strategic growth remains a strong catalyst. The bank has partnered with NTUC in Singapore to launch a digital banking venture, a move that could:

📌 Expand revenue streams beyond traditional banking

📌 Strengthen its foothold in Southeast Asia’s fintech sector

📌 Tap into Singapore’s high-growth financial services industry

This positions Standard Chartered as a leader in the digital banking revolution, potentially boosting long-term profitability and stock price appreciation.

Final Thoughts: Hold or Take Profits?

• A pullback to the HKD 100-105 range could offer a good re-entry point for those who missed the initial rally.

Do practice position sizing and risk management and never risk more than you can afford to lose …

🚀 What are your thoughts? Would you take profits here, or do you see more upside for Standard Chartered? Let’s discuss