Title ESG Equity Note: CTBC FHC (2891 TT) Buy, TP: NT$23.0
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Title:ESG Equity Note: CTBC FHC (2891 TT) Buy, TP: NT$23.0
Download File:2891 TT CTBC ESG note 200318--sinopac.pdf 
Summary:Lower TP to NT$23 (1.2x 2020F P/B); Maintain Buy: We lower our 2020 net profit and EPS estimates to NT$39.65bn (-7.5% YoY) and NT$1.99, from previous NT$43.83bn (-1% YoY) and NT$2.2. Though successive rate cuts by global central banks will hurt the NIM and net interest income of CTBC Bank, the surging prices of international bonds will likely add fuel to the investment income of CTBC Bank and earnings of Taiwan Life. As for dividend policy, we project CTBC will pay out NT$1.1/share, translating to a high yield of 6.1% based on the closing price on MAR 12. Valuation-wise, CTBC is attractively valued at 1.08x end-2020F BVPS, toward the lower band of its 3-year P/B of 0.95x-1.65x. We retain a Buy rating but adjust our TP to NT$23 (1.2x 2020F P/B) amid the rate cutting atmosphere.
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