Analyst Research Report Snapshot


E. SUN FHC (2884 TT, NT$20.0, N): Downgrade to Neutral




KGI Greater China


28 Oct 2013





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Limited upside; capital raising discussion back on the table 1Q-3Q13 earnings up 16% YoY to NT$6.6bn, in line at 77% of our full-year earnings forecast; 2013F & 2014F earnings growth unchanged at 21% & 10% YoY 10% core revenue growth outlook intact, fee income the bright spot Decent earnings supportive of domestic business growth; but potential overseas expansion brings capital raising discussions back on the table 12M target price raised to NT$21.6 from NT$21, on 1.3x our 2014F BVPS; given limited share upside and uncertainties of capital raising, downgrade to Neutral Shares of E. SUN have outperformed the Taiex and the financial index by a respective 6.9% and 6.4% over the past three months on decent earnings delivery. The stock is currently trading at 1.2x 2014F BVPS, close to the high end of the historical range of 0.7-1.3x. Rolling our valuation base to 2014F BVPS and unchanged target PB of 1.3x, we raise our 12-month target price to NT$21.6 from NT$21, implying 8% upside. We believe E. SUN will continue to deliver robust growth in most earnings drivers on decent market share gains and customer cross-selling. However, given limited share price upside post recent outperformance and uncertainties of capital raising, we downgrade our rating from Outperform to Neutral.

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