BNP Paribas Securities (Taiwan) Co suggested that investors sell SinoPac Holdings (永豐金控) and cut its earning forecast for the nation's 10th-biggest financial group by assets significantly, citing the company's overhang of card default problems and slow synergy creation in the face of union boycotts.
BNP Paribas Securities retained its "Reduce" rating on SinoPac with a new target price of NT$14, down 3.4 percent from NT$14.5 previously, after attending the company's investor conference last Friday, according to the brokerage's research note released yesterday.
SinoPac shares closed down 0.96 percent at NT$15.50 on the Taiwan Stock Exchange yesterday.
The French securities house slashed its earning forecast for the financial group this year to NT$6.44 billion (US$196,000), or NT$0.92 per share, down by around 20 percent from the previous forecast of NT$8.03 billion, or NT$1.14 per share, the report said.
"We are one of the few brokers in the market with a negative view on SinoPac, as we believe its valuations are not justified by its fundamentals," Jesse Wang (王嘉樞), head of equity research with BNP Paribas Securities said.
Despite a possible earnings rebound in the current quarter, the strength of the upswing could be weaker than the market expects, due to the overhang of consumer bad loans that could narrow the company's net interest margin and suggests continuous write-offs of bad debts, Wang said.
SinoPac posted a second-quarter net profit of NT$264 million, or NT$0.04 per share, down from NT$2.1 billion, or NT$0.30 per share, in the first quarter. This was mainly due to escalating card provision expenses of NT$2.4 billion, up from NT$1.8 billion, over the same period.
The sluggish stock market in the April-June quarter that overshadowed the financial group's brokerage unit SinoPac Securities Corp (建華證券), also contributed to the shortfall.
Labor unions that have been proactive in attempting to maximize their own interests also pose a risk to synergy creation, as SinoPac is promoting the merger between Bank SinoPac (建華銀行) and International Bank of Taipei (IBT, 台北國際商銀) in November this year, Wang said.
Meanwhile, Macquarie Securities appeared more bullish about the financial holding firm and maintained its "Outperform" recommendation with a target price of NT$18.50.
It is believed that the company could offer longer-term potential following the expansion of its presence in the Greater Taipei area through the merger deal, the Australian brokerage said in its research note released yesterday.
However, the merger plan may face problems, as the IBT union said yesterday that it will adopt a hardline stance and gather outside the Financial Supervisory Commission to petition for the suspension of the merger this afternoon.
"We could go on strike to protest the merger, as we feel we have been sold out after Chairman Ho Show-chuan (
The Bank SinoPac union also held protests last month and demanded the financial regulator safeguard labor rights in the proposed merger deal.
Zhang Yazhou was sitting in the passenger seat of her Tesla Model 3 when she said she heard her father’s panicked voice: The brakes do not work. Approaching a red light, her father swerved around two cars before plowing into a sport utility vehicle and a sedan, and crashing into a large concrete barrier. Stunned, Zhang gazed at the deflating airbag in front of her. She could never have imagined what was to come: Tesla Inc sued her for defamation for complaining publicly about the vehicles brakes — and won. A Chinese court ordered Zhang to pay more than US$23,000 in
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
‘NO DISRUPTION’: A US trade association said that it was ready to work with the US administration to streamline the program’s requirements and achieve shared goals The White House is seeking to renegotiate US CHIPS and Science Act awards and has signaled delays to some upcoming semiconductor disbursements, two sources familiar with the matter told reporters. The people, along with a third source, said that the new US administration is reviewing the projects awarded under the 2022 law, meant to boost US domestic semiconductor output with US$39 billion in subsidies. Washington plans to renegotiate some of the deals after assessing and changing current requirements, the sources said. The extent of the possible changes and how they would affect agreements already finalized was not immediately clear. It was not known
A move by US President Donald Trump to slap a 25 percent tariff on all steel imports is expected to place Taiwan-made steel, which already has a 25 percent tariff, on an equal footing, the Taiwan Steel & Iron Industries Association said yesterday. Speaking with CNA, association chairman Hwang Chien-chih (黃建智) said such an equal footing is expected to boost Taiwan’s competitive edge against other countries in the US market, describing the tariffs as "positive" for Taiwanese steel exporters. On Monday, Trump signed two executive orders imposing the new metal tariffs on imported steel and aluminum with no exceptions and exemptions, effective