Chinatrust Financial Holding Co (
"There is a great likelihood of lower earnings this year ... as credit and cash card bad loans could offset the growth in other businesses like wealth management," Chinatrust Financial Chief Financial Officer Perry Chang (
The company does not know whether the impact on the company brought by consumers' bad debts will last for one or two more quarters until the financial results of the first quarter comes out, Chang said.
Chinatrust Financial had after-tax earnings of NT$16.12 billion (US$499.07 million), or NT$2.2 per share, last year, up about 5 percent from NT$15.39 billion, or NT$2.6 per share, in 2004.
In a bid to address the problem of spiraling consumer bad debt, the flagship unit Chinatrust Commercial Bank (
"We are not surprised about the company's declining profits this year," said Shirley Yang (
Chinatrust Commercial may need to budget an additional NT$8 billion to NT$10 billion in this year's provision expenses compared with last year in order to fully cover the potential bad loans, she said.
This could in turn dent parent Chinatrust Financial's net profit by nearly 30 percent to some NT$12 billion this year, the analyst predicted.
Chinatrust Financial, the nation's sixth-largest financial group by assets, announced last week that it would within a year acquire a 10-percent stake in bigger rival Mega Financial Holding Co (兆豐金控), the second-largest financial services provider in Taiwan, for NT$27.5 billion, in line with the government's pledge to consolidate the finance sector by halving the number of financial holding companies to seven by the year-end.
Chang yesterday declined to elaborate on the progress of that share-buying plan, or its possible seats on Mega Financial's board, citing the need to prevent a possible influence on the firms' stock prices as the deal is being hammered out.
Chinatrust Financial reportedly bought a nearly 3 percent stake in Mega Financial in two trading days after the announcement.
In response, state-controlled Mega Financial President Lin Tzong-yeong (
Common practice against acquisition attempts include purchasing the rival's shares, or asking a friendly third party to compete with the rival in order to increase the difficulty and costs of a hostile takeover, Lin said. He did not elaborate on Mega Financial's possible countermeasures.
Mega Financial created earnings of NT$22.51 billion, or NT$2.09 per share, last year, up from NT$21.9 billion, or NT$2.22 per share in 2004.
Morgan Stanley announced on Monday that it would upgrade Mega Financial to "overweight" from "equal-weight" on robust fundamentals and low exposure to consumer lending.
It set a target price of NT$26.3, representing a 22 percent upside in share price.
The US brokerage meanwhile retained its "equal-weight" rating on Chinatrust Financial and cut its earnings per share estimate by 24 percent to NT$16.7 this year, citing the impact of unwinding consumer bad debts and the uncertainty of its acquisition plan.
Mega Financial closed down 1.44 percent at NT$24 while Chinatrust Financial advanced 0.56 percent at NT$26.75 on the Taiwan Stock Exchange yesterday.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) halted shipments to a customer this month after its semiconductors were sent to China’s Huawei Technologies Co (華為), potentially breaching US sanctions, a government official said. The US slapped sanctions on Huawei in 2019, and expanded them the following year, over fears its technology could be used for Beijing’s espionage operations. The restrictions prevent TSMC from selling semiconductors to Huawei. However, TSMC discovered on Oct. 11 that chips made for a “specific customer” had ended up with the Chinese company, a Taiwanese official with knowledge of the incident said on the condition of anonymity. TSMC “immediately activated
US SANCTIONS: The Taiwan tech giant has ended all shipments to China-based Sophgo Technologies after one of their chips was discovered in a Huawei phone Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) suspended shipments to China-based chip designer Sophgo Technologies Ltd (算能科技) after a chip it made was found on a Huawei Technologies Co (華為) artificial intelligence (AI) processor, according to two people familiar with the matter. Sophgo had ordered chips from TSMC that matched the one found on Huawei’s Ascend 910B, the people said. Huawei is restricted from buying the technology to protect US national security. Reuters could not determine how the chip ended up on the Huawei product. Sophgo said in a statement on its Web site yesterday that it was in compliance with all laws
TECH TITANS: Nvidia briefly overtook Apple again on Friday after becoming the world’s largest company for a short period in June, as Microsoft fell to third place Nvidia Corp dethroned Apple Inc as the world’s most valuable company on Friday following a record-setting rally in the stock, powered by insatiable demand for its specialized artificial intelligence (AI) chips. Nvidia’s stock market value briefly touched US$3.53 trillion, slightly above Apple’s US$3.52 trillion, London Stock Exchange Group data showed. Nvidia ended the day up 0.8 percent, with a market value of US$3.47 trillion, while Apple’s shares rose 0.4 percent, valuing the iPhone maker at US$3.52 trillion. In June, Nvidia briefly became the world’s most valuable company before it was overtaken by Microsoft Corp and Apple. The tech trio’s market capitalizations have been
Shares of Starlux Airlines Co (星宇航空) surged more than 53 percent on its debut on the Taiwan stock exchange yesterday. Starlux shares closed up 53.75 percent at NT$30.75 from its initial public offering price of NT$20 after retreating in late trading from a 60 percent rise. China Airlines Ltd (CAL, 中華航空) rose 0.90 percent to close at NT$22.35, while EVA Airways Corp (長榮航空) gained 0.40 percent to close at NT$37.70. In Taiwan, a newly listed stock is allowed to go beyond the 10 percent maximum increase or decline in its first five trading sessions. At the listing ceremony, Starlux chairman Chang Kuo-wei (張國煒) said
RSS