Table of contents
Investment summary................................................................3
Size of the opportunity....................................................................3
Buy on dips ....................................................................................3
Potential share price drivers..........................................................4
Recommendations..................................................................6
Cross-straits talks provide optimism .....................................8
Timeline and agenda of the discussion .......................................8
The progress likely to be slow – Taiwan’s wish list .......................8
We expect long-term structural changes in the domestic economy ........9
However, we still see structural issues with the financial service sector ........12
Operating outlook...................................................................13
Issue 1: NIM should pick up in 2H09 ..........................................13
Issue 2: Improved visibility in asset quality...................................15
Issue 3: Benefits from easy monetary policy ............................17
Issue 4: Reduced risks for recapitalization................................19
Issue 5: Potential risks ..........................................................22
Sinopac Financial Holdings...................................................26
Fubon Financial Holdings......................................................30
Chinatrust Financial Holdings...............................................35
Yuanta FHC.............................................................................40
Chang Hwa Bank ....................................................................46
First Financial Holding Co Ltd...............................................52
Cathay Financial Holdings.....................................................56
Taishin Financial Holdings ....................................................65
Shin Kong Financial Holding Company ...............................69
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