BNP Paribas Securities (Taiwan) Co yesterday rated Chang Hwa Bank (彰化銀行) a favorable financial stock pick, eyeing the state-controlled lender's stable earnings outlook and limited exposure to the consumer credit abuse issue.
"The bank represents one of the preferable plays within the banking sector," said Jesse Wang (
Wang said Chang Hwa has a stable earnings outlook and the draft Bankruptcy Bill (
In addition, the bank has been delivering earnings momentum through both core revenue growth and recovery of non-performing loans.
The bank's prospects also look promising on the back of revenue injections from new business areas and a discreet credit control policy, Wang said in the report.
Chang Hwa's first-half earnings reached NT$5.16 billion (US$157 million), or NT$1.03 per share. This compares with a loss of NT$8.75 billion, or NT$1.44 per share, a year ago.
With decent asset quality among state banks, significant distribution channels and a big customer base, Chang Hwa could be an investment target in Taiwan's banking sector, Wang wrote.
In comparison, BNP Paribas in July gave Chinatrust Financial Holding Co (中信金控) a "reduce" rating, and did the same to Taishin Financial Holding Co (台新金控) last month on concern over downside risk from the bankruptcy bill.
Earlier this week, BNP Paribas maintained a "Hold" rating on Mega Financial Holding Co (
Wang said the inevitable consequence would be a mounting sense of regret, with the reputation of both Mega Financial management and the government brought into jeopardy, if the company partakes in TBB's recapitalization rights issued at NT$10 or more per share.
TBB's asking price appears to be expensive, as an analysis shows that its adjusted book value stands at below NT$6 per share, Wang said.
TBB would add little value to Mega Financial, because the group, unlike private banks, does not need the lender's branch network, he said.
In addition, the lender's strength in the small and medium enterprise segment is falling in market value because customers are migrating across the Taiwan Strait, he added.
Shares of Chang Hwa closed down 0.53 percent at NT$18.60 on the Taiwan Stock Exchange yesterday, while Mega Financial rose 0.46 percent at NT$21.65 and TBB dropped 3.32 percent to NT$5.84.
Following the recent market correction, Chang Hwa shares are trading at eight times to nine times consensus earnings per share for this year.
This compares with a multiple of up to 13 times for the major private banks covered by BNP Paribas, which points to a potential upside for Chang Hwa, according to the French brokerage.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last