Seetheendpagesofthispresentationforanalystcertificationandimportantdisclosures,includingnon-USanalystdisclosures.J.P.Morgandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.AsiaPacificEquityResearchAug2019TaiwanFinancialsJemmyHuangACJ.P.MorganSecurities(Taiwan)LimitedTelephone:(886)2-2725-9870Email:jemmy.s.huang@jpmorgan.comLeoWengJ.P.MorganSecurities(AsiaPacific)LimitedTelephone:(852)2800-8511Email:leo.weng@jpmorgan.comKatherineLeiJ.P.MorganSecurities(AsiaPacific)LimitedTelephone:(852)2800-8552Email:katherine.lei@jpmorgan.com2Source:Companydata,BloombergandJ.P.Morganestimates.Valuation2-Aug19MktCapPTRatingP/EP/BROEDVDyieldBanksTickerPrice(NT$)US$mnNT$19E20E19E20E19E20E19EE.Sun2884TT25.259,35724.0N13.912.71.61.511.8%12.1%3.2%Mega2886TT31.3513,59827.5N14.413.81.31.39.3%9.5%5.5%Yuanta2885TT17.056,35518.6OW9.58.90.90.89.3%9.5%5.2%First2892TT22.959,03117.4UW15.114.31.31.39.0%9.2%4.6%Taishin2887TT14.255,10715.8OW10.89.81.11.09.8%10.6%4.2%Sinopac2890TT12.054,33211.6N12.011.10.90.97.9%8.3%5.8%HuaNan2880TT21.357,86114.4UW15.314.81.31.39.0%8.8%2.9%InsurersCathay2882TT40.1016,06848.0N9.88.81.00.910.3%10.3%3.8%Fubon2881TT42.3513,82354.0OW8.27.31.00.911.9%12.0%4.7%CTBC2891TT20.0512,46823.8OW9.68.61.11.112.4%12.4%6.0%Shinkong2888TT8.873,46910.0N11.77.60.60.54.9%7.2%2.1%ChinaLife2823TT24.853,53830.0OW10.49.31.00.911.5%10.3%2.9%LeasingChailease5871TT125.505,317130.0OW10.89.52.32.022.8%22.3%4.2%3Banksmightstayinfavor,butlifersdeservemoreattention◆Limitedupsidetoconsensusearningsgivenmoderatingmacrooutlook◆MoredownsidethanupsideonNIMduetoofficialFEDratecuts◆ModestearningsgrowthinFY19stillachievableduetolowerbasein4Q18andwithoutimminentassetqualityrisks◆SequentialincreaseinDPSand/orcashpayoutratios◆Tradingandhedgingperformancebetterthanfeared◆CapitalconcernsonIFRS17are...
