Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Thematic (Sector/Industry)

<ul>
<li>Many of Taiwan's banks saw loans rise by 30-46% over the past three years</li>
<li>Well known large names, Fubon, Taishin, Chinatrust are all in this group</li>
<li>With rising rates and higher prices, there is increased credit risk</li>
</ul>


Many of Taiwan's banks saw loans rise by 30-46% over the past three years
Well known large names, Fubon, Taishin, Chinatrust are all in this group
With rising rates and higher prices, there is increased credit risk


<ul>
<li>Monthly numbers through May show a meaningful deterioration in revenue and profit</li>
<li>We are doubtful that June brings a rebound, given more volatility, higher risk</li>
<li>Higher rates, higher reserve requirements, can mean less lending, less NIM</li>
</ul>


Monthly numbers through May show a meaningful deterioration in revenue and profit
We are doubtful that June brings a rebound, given more volatility, higher risk
Higher rates, higher reserve requirements, can mean less lending, less NIM


External broker reports(aggregated public sources), Capital Securities Corp

Capital Securities

External broker reports(aggregated public sources)

Capital Securities Corp

Capital Securities provides clients with investment services covering diversified financial products. We have outstanding business performance amid intense competition in the domestic securities market. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

CTBC Financial Holding / Equity Bottom-Up

Valuation appears fair; recommend NEUTRAL. CTBC FHC posted excellent 1Q~3Q21 net profit of NTD46.475bn (+28.6% YoY). Catalyzed by simultaneous growth in its subsidiaries, Taiwan Life and CTBC Bank, CTBC FHC is estimated to post FY21 net profit of NTD54.696bn with EPS of NTD2.74. However, as CTBC FHC is currently traded fairly at 1.2x FY21 PBR, we recommend NEUTRAL.<div class="content-highlight">Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</div>

Valuation appears fair; recommend NEUTRAL. CTBC FHC posted excellent 1Q~3Q21 net profit of NTD46.475bn (+28.6% YoY). Catalyzed by simultaneous growth in its subsidiaries, Taiwan Life and CTBC Bank, CTBC FHC is estimated to post FY21 net profit of NTD54.696bn with EPS of NTD2.74. However, as CTBC FHC is currently traded fairly at 1.2x FY21 PBR, we recommend NEUTRAL.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Fubon Financial Holding Co / Event-Driven

<a href="https://www.smartkarma.com/entities/fubon-financial-holding-co" target="_blank" data-smartkarma-citation="entities:11869:1" rel="noopener">Fubon Financial Holding Co (2881 TT)</a> announced many months ago when it took over <a href="https://www.smartkarma.com/entities/jih-sun-financial-holdings" target="_blank" data-smartkarma-citation="entities:17971:1" rel="noopener">Jih Sun Financial (5820 TT)</a> that it would do an equity raise to do so. In Taiwan, doing an equity raise via rights issue is a relatively common event. The company applied to do so, got permission in early August, then announced in late August a timeline and key details as it announced its H1 results. <a href="https://www.smartkarma.com/profiles/janaghan-jeyakumar-cfa" target="_blank" data-smartkarma-citation="accounts:3173" rel="noopener">Janaghan Jeyakumar, CFA</a> discussed this rights issue in <a href="https://www.smartkarma.com/insights/fubon-financial-holding-co-2881-tt-rights-issue" target="_blank" data-smartkarma-citation="insights:56572" rel="noopener">Fubon Financial Holding Co (2881 TT): Rights Issue</a> a week ago. Pricing was expected to be confirmed in the days ahead, and it has been confirmed. The 548,000,000 common shares will be issued at NT$58.9/share each. The 333,330,000 C Class Preferred Shares (non-cumulative dividend) will be issued at NT$60/share each. The dividend rate was set at 3.0% (7yr IRS + a fixed spread (7yr IRS 0.6538% + 2.3462% spread)). I called the company to chat and had some questions. They got back to me today.

Fubon Financial Holding Co (2881 TT) announced many months ago when it took over Jih Sun Financial (5820 TT) that it would do an equity raise to do so. In Taiwan, doing an equity raise via rights issue is a relatively common event. The company applied to do so, got permission in early August, then announced in late August a timeline and key details as it announced its H1 results. Janaghan Jeyakumar, CFA discussed this rights issue in Fubon Financial Holding Co (2881 TT): Rights Issue a week ago. Pricing was expected to be confirmed in the days ahead, and it has been confirmed. The 548,000,000 common shares will be issued at NT$58.9/share each. The 333,330,000 C Class Preferred Shares (non-cumulative dividend) will be issued at NT$60/share each. The dividend rate was set at 3.0% (7yr IRS + a fixed spread (7yr IRS 0.6538% + 2.3462% spread)). I called the company to chat and had some questions. They got back to me today. 

Fubon Financial Rights - Common Share Rights Should Be Exercised, Pref Rights Are Worth Near Zero

Taiwan

CTBC Financial Holding Company Ltd. is a holding company.  Through its subsidiaries, the Company provides a variety of banking and financial services, including deposit, loan, guarantee, international banking, trust banking, credit card, investment banking, safety deposit box, and Internet banking services.

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CTBC Financial Holding (2891 TT)

Taiwan - Fastest Growers at 46%

The fastest growing banks in Taiwan, have seen loans up 30-46% over the past 3 years. There is huge seasoning risk with rising rates and high...

Daniel Tabbush

Taiwan - Financial Groups Profit Demise

Taiwan's financial holding companies are reporting dwindling monthly profit through May and some with losses. This is driven by insurance, but...

Daniel Tabbush

CTBC FHC (2891 TT, NEUTRAL, NTD24.70)

Valuation appears fair; recommend NEUTRAL. CTBC FHC posted excellent 1Q~3Q21 net profit of NTD46.475bn (+28.6% YoY). Catalyzed by simultaneous...

Capital Securities

CTBC FHC (2891 TT, NEUTRAL, NTD24.70)

Valuation appears fair; recommend NEUTRAL. CTBC FHC posted excellent 1Q~3Q21 net profit of NTD46.475bn (+28.6% YoY). Catalyzed by simultaneous...

Capital Securities

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Taiwan - Fastest Growers at 46%

The fastest growing banks in Taiwan, have seen loans up 30-46% over the past 3 years. There is huge seasoning risk with rising rates and high...

Daniel Tabbush

Taiwan - Financial Groups Profit Demise

Taiwan's financial holding companies are reporting dwindling monthly profit through May and some with losses. This is driven by insurance, but...

Daniel Tabbush

CTBC FHC (2891 TT, NEUTRAL, NTD24.70)

Valuation appears fair; recommend NEUTRAL. CTBC FHC posted excellent 1Q~3Q21 net profit of NTD46.475bn (+28.6% YoY). Catalyzed by simultaneous...

Capital Securities

CTBC FHC (2891 TT, NEUTRAL, NTD24.70)

Valuation appears fair; recommend NEUTRAL. CTBC FHC posted excellent 1Q~3Q21 net profit of NTD46.475bn (+28.6% YoY). Catalyzed by simultaneous...

Capital Securities

Fubon Financial Rights - Common Share Rights Should Be Exercised, Pref Rights Are Worth Near Zero

Fubon Financial will issue Rights. Rights go ex- on 6 Sep. The Common Share Rights are worth exercising unless the stock plummets. The Pref Rights...

Travis Lundy