Analyst Research Report Snapshot


E. Sun FHC (2884 TT, NT$19.1, N): Maintain Neutral




KGI Greater China


25 Feb 2014





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Increased likelihood of equity fundraising in 2014 2013 earnings up 19.8% YoY to NT$8.5bn, in line with our forecast Aggressive 2014 guidance similar to our earnings forecast of NT$9.4bn, up 11% YoY Increased likelihood of equity fundraising in 2014, estimated to generate 7-8% dilution 12M target price cut to NT$20.6 from NT$21.6 to reflect 4.3% share dilution from ECB conversion; target PB kept at 1.3x; given limited share upside & capital raising probability, we maintain our Neutral rating Shares of E. Sun have underperformed the Taiex and financial index by a respective 6.0% and 2.4% over the past three months on capital concerns and ECB conversion. The stock is currently trading at 1.2x 2014F BVPS, close to the high end of the historical range of 0.7-1.3x. To reflect 4.3% share dilution from ECB conversion and based on 2014F BVPS and unchanged target PB of 1.3x, we have fine-tuned our 12-month target price down to NT$20.6 from NT$21.6. 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 near-term overhangs of limited share upside and increased likelihood of capital raising, we maintain our Neutral rating on the stock.

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