CTBC Financial "Best positioned in an ongoing sector upcycle; reiterate Buy"

研报英文原文证据摘录

CTBC Financial "Best positioned in an ongoing sector upcycle; reiterate Buy"

change (IFRS 15 adoption). Nevertheless, the YTD strong domestic equity market does

12/27E 4.50 4.81 7 4.57

contribute to a higher group BV and lower double leverage ratio (1Q26: 120.6%). On

12/28E 5.01 5.11 2 4.66

rate outlook, management expects Fed to hold policy rates unchanged this year while

Taiwan central bank may hike by 12.5-25bps. We think this scenario is likely accretive to Alex Ye

lifers' BV as well, as higher Taiwan rates should reduce insurance liabilities (by a larger Analyst

magnitude than USD bond MTM loss on the asset side). alex.ye@ubs.com

+86 755 2215 8858

Dividend outlook: we expect broadly stable payout ratio on IFRS earnings Helen Li, CFA

Unlike other life-centric peers that highlight future dividend payout will be based on an Analyst

helen-za.li@ubs.com

adjusted earnings that include OCI equity disposal gain, CTBC management indicated

+852-2971 6066

an intention to stick with IFRS earnings for future dividend decision. As such, we expect

the company to maintain a broadly stable dividend payout ratio of around 60% (against

IFRS earnings).

Valuation: PT from NT$50.0 to NT$65.0; Buy rating

We lift our SOTP-based PT by 30%, reflecting: 1) 6-7% EPS upgrade for 2026-27E ; 2) a

terminal bank ROE of 13.8% (was 12.5%); and 3) removal of a 10% conglomerate

discount, as overhang of a potential lifer M&A is now largely removed. Our PT implies

target 26E dividend yield (DY) of 4.2%, largely in-line with the average trading DY of

peer banks. Potential catalysts include bank earnings upside from loan growth/ Taiwan

rate hike, and life BV accretion due to strong equity market/ Taiwan rate hike.

Highlights (NT$m) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E