Standing out on the back of strong ROE
​Reiterate BUY and lift TP to NT$52: We remain positive on Fubon as 1) Fubon Life’s recurring income can increase under a Fed rate hike policy; 2) Fubon Bank will have less provision pressure for TRF in 2017F, as exposure to TRF has fallen to 10% of that in 2015. We expect bond and equity value to fall due to volatile bond/equity markets, lowering Fubon FHC’s BVPS by NT$1.3 (3% of 2017F BVPS), which we view as controllable. We lift our TP to NT$52 from NT$49, as we raise TFB’s 2017F P/B multiple from 1x to 1.1x on its higher 2017F ROE of 10.5% (vs. 2017F bank industry avg. ROE of 9%).
Fubon Financial Holding and its subsidiaries are engaged in the business of property and casualty insurance; brokerage, margin lending and securities financing and refinancing, security transfer services, brokerage services, securities underwriting, and principal transactions; commercial banking operations; life insurance underwriting; raising securities investment trust fund through issuance of beneficiary certificates to invest in securities and related products, managing discretionary managed accounts for investors, and other operations approved by the authorities; trust operations, handling of the public - benefit lottery operations, and other authorized operations.
Yuanta is a Taiwan-headquartered brokerage with a growing presence in Asia, especially across Greater China. Our team of 140+ provides cutting-edge analysis on key sectors, spread across offices in Taiwan, Hong Kong, Shanghai (A-Share), Seoul and Jakarta. With an ever-expanding coverage universe of 400+ companies, we provide in depth analysis with unique local color to investors. Consistently being voted the Best Investment Consulting Firm in Taiwan in the AsiaMoney broker poll is evidence of our strength. We target providing an extensive range of research, from small, to mid-sized, to large cap. We bring you the big, well-covered names, as well as going off the beaten track to research the less-familiar companies.
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