A long-term entry point
​Cathay FHC’s stock price has corrected by 25% since last August; we believe the worst has passed and there is more upside risk than downside. We expect 1) YoY earnings declines to stabilize; 2) the rate cut impact to diminish in 2H16F; and 3) Cathay FHC to be the largest beneficiary of the US Fed’s rate hike. Therefore, we upgrade Cathay FHC to BUY with a TP of NT$44, based on a raised P/EV of 0.7x for Cathay Life.
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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