LSE:CFHS

Stock Analysis Report

Cathay Financial Holding

Executive Summary

Cathay Financial Holding Co., Ltd., through its subsidiaries, provides various financial services in Taiwan.

Rewards

Trading at 45.7% below its fair value

Earnings are forecast to grow 7.62% per year

Pays a high and reliable dividend of 6.24%

Risk Analysis

No risks detected for CFHS from our risk checks.


Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

How has Cathay Financial Holding's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CFHS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

CFHS

-10.5%

GB Insurance

-8.6%

GB Market


1 Year Return

-10.8%

CFHS

-11.4%

GB Insurance

-1.3%

GB Market

Return vs Industry: CFHS matched the UK Insurance industry which returned -11.4% over the past year.

Return vs Market: CFHS underperformed the UK Market which returned -1.3% over the past year.


Shareholder returns

CFHSIndustryMarket
7 Day0%-10.5%-8.6%
30 Day0%-6.7%-8.4%
90 Day-10.5%-4.1%-5.3%
1 Year-8.5%-10.8%-1.4%-11.4%4.0%-1.3%
3 Year-1.0%-10.5%5.6%-13.1%7.6%-6.1%
5 Year13.1%-4.9%15.1%-14.5%23.4%-4.8%

Price Volatility Vs. Market

How volatile is Cathay Financial Holding's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Cathay Financial Holding undervalued compared to its fair value and its price relative to the market?

45.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CFHS ($13.6) is trading below our estimate of fair value ($25.06)

Significantly Below Fair Value: CFHS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CFHS is good value based on its PE Ratio (11x) compared to the Insurance industry average (13.5x).

PE vs Market: CFHS is good value based on its PE Ratio (11x) compared to the UK market (16.8x).


Price to Earnings Growth Ratio

PEG Ratio: CFHS is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: CFHS is good value based on its PB Ratio (0.7x) compared to the GB Insurance industry average (1.7x).


Next Steps

Future Growth

How is Cathay Financial Holding forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

7.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CFHS's forecast earnings growth (7.6% per year) is above the savings rate (0.5%).

Earnings vs Market: CFHS's earnings (7.6% per year) are forecast to grow slower than the UK market (13.2% per year).

High Growth Earnings: CFHS's earnings are forecast to grow, but not significantly.

Revenue vs Market: CFHS's revenue is expected to decline over the next 3 years (-5.5% per year).

High Growth Revenue: CFHS's revenue is forecast to decline over the next 3 years (-5.5% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CFHS's Return on Equity is forecast to be low in 3 years time (9.2%).


Next Steps

Past Performance

How has Cathay Financial Holding performed over the past 5 years?

-1.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CFHS has high quality earnings.

Growing Profit Margin: CFHS's current net profit margins (5%) are lower than last year (6.4%).


Past Earnings Growth Analysis

Earnings Trend: CFHS's earnings have declined by -1.6% per year over the past 5 years.

Accelerating Growth: CFHS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CFHS had negative earnings growth (-11%) over the past year, making it difficult to compare to the Insurance industry average (23.4%).


Return on Equity

High ROE: CFHS's Return on Equity (6.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cathay Financial Holding's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: CFHS has a low level of unsold assets or inventory.

Debt Coverage by Assets: CFHS's debt is covered by short term assets (assets are 9.3x debt).


Financial Institutions Analysis

Asset Level: CFHS's level of assets compared to its equity is moderate.

Allowance for Bad Loans: Insufficient data to determine if CFHS has a sufficient allowance for bad loans.

Low Risk Liabilities: CFHS reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if CFHS has an acceptable proportion of non-loan assets held.

Low Risk Deposits: CFHS has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if CFHS has an appropriate level of bad loans.


Next Steps

Dividend

What is Cathay Financial Holding's current dividend yield, its reliability and sustainability?

6.24%

Current Dividend Yield


Dividend Yield vs Market

company6.2%marketbottom25%1.9%markettop25%5.4%industryaverage5.3%forecastin3Years4.6%

Current dividend yield vs market & industry

Notable Dividend: CFHS's dividend (6.24%) is higher than the bottom 25% of dividend payers in the UK market (1.94%).

High Dividend: CFHS's dividend (6.24%) is in the top 25% of dividend payers in the UK market (5.4%)


Stability and Growth of Payments

Stable Dividend: CFHS's dividends per share have been stable in the past 10 years.

Growing Dividend: CFHS's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CFHS's dividends in 3 years are forecast to be well covered by earnings (38.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

9.0yrs

Average management tenure


CEO

Chang-Ken Lee (60yo)

9yrs

Tenure

0

Mr. Chang-Ken Lee has been the President of Cathay Financial Holding Co., Ltd. since February 25, 2011. Mr. Lee served as a Director of Cathay United Bank Co., Ltd., a subsidiary of Cathay Financial Holdi ...


Leadership Team

NamePositionTenureCompensationOwnership
Chang-Ken Lee
President & Director9yrsno data0.00094% NT$165.9k
Grace Chen
CFO & Senior EVP16.1yrsno datano data
Sophia Cheng
Chief Investment Officer & Senior EVP7.6yrsno datano data
Chia-Sheng Chang
Chief Information Officer & Senior EVP4.8yrsno datano data
Yajou Chang
Manager of IR Department0yrsno datano data
Judie Hsu
Chief Compliance Officer & Executive VP4.9yrsno datano data
Shan-Chi Liu
Senior Vice President9.4yrsno datano data
Shu-Ying Wu
Executive Vice President6.8yrsno data0.000020% NT$3.5k
David P. Sun
Head of Marketing Planning Div. & Senior EVP12yrsno data0.000050% NT$8.8k
Chang-Chao Liao
Senior Vice President10.8yrsno datano data

9.0yrs

Average Tenure

55yo

Average Age

Experienced Management: CFHS's management team is seasoned and experienced (9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Chang-Ken Lee
President & Director9yrsno data0.00094% NT$165.9k
Feng-Chiang Miau
Independent Director3.7yrsno datano data
Hong-Tu Tsai
Chairman of the Board0yrsno data0.55% NT$96.3m
Tseng-Yun Tsai
Honorary Vice Chairman0yrsno datano data
Ming-Ho Hsiung
Director12.7yrsno data0.00044% NT$77.6k
Tiao-Kuei Huang
Director8.7yrsno data0.0023% NT$407.6k
Cheng-Chiu Tsai
Director12.7yrsno data0.0045% NT$795.8k
Tsu-Pei Chen
Vice Chairman of the Board0yrsno data0.0011% NT$195.9k
Jen-Ho Chang
Chairman of Cathay Venture Inc0yrsno datano data
Yung-Do Way
Independent Director2.7yrsno datano data

9.2yrs

Average Tenure

67yo

Average Age

Experienced Board: CFHS's board of directors are considered experienced (9.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Cathay Financial Holding Co., Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cathay Financial Holding Co., Ltd.
  • Ticker: CFHS
  • Exchange: LSE
  • Founded: 2001
  • Industry: Life and Health Insurance
  • Sector: Insurance
  • Market Cap: NT$533.354b
  • Listing Market Cap: NT$17.646b
  • Shares outstanding: 13.32b
  • Website: https://www.cathayholdings.com

Number of Employees


Location

  • Cathay Financial Holding Co., Ltd.
  • No.296, Ren’ai Road
  • Sec. 4
  • Taipei City
  • 106
  • Taiwan

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
2882TSEC (Taiwan Stock Exchange)YesCommon StockTWTWDDec 2001
CHYF.FOTCPK (Pink Sheets LLC)SPON GDR REP 10 ORD TWD10 REG'S'USUSDFeb 2003
CFHSLSE (London Stock Exchange)SPON GDR REP 10 ORD TWD10 REG'S'GBUSDFeb 2003
CATFHBDL (Bourse de Luxembourg)SPON GDR REP 10 ORD TWD10 REG'S'LUUSDFeb 2003
2882ATSEC (Taiwan Stock Exchange)A PRF SHARE TWD10TWTWDJan 2017
2882BTSEC (Taiwan Stock Exchange)B PRF SHARE TWD10TWTWDAug 2018

Biography

Cathay Financial Holding Co., Ltd., through its subsidiaries, provides various financial services in Taiwan. The company’s Banking segment provides foreign exchange and guarantee, foreign currency investment advisory, trust, offshore banking, and other financial services. Its Life Insurance segment sells traditional insurance policies, investment-linked insurance policies, and floating-rate annuity insurance products. The company’s Properties Insurance segment offers fire insurance, marine insurance, land and air insurance, liability insurance, bonding insurance, reinsurance, and other insurance services. Its Securities segment provides services for securities brokerage, discretionary and underwriting, and innovation and development of financial products and services. The company also provides real estate investment and management; and wealth management services, as well as office equipment leasing, risk management software, and securities investment consulting services. It has approximately 675 branches. Cathay Financial Holding Co., Ltd. was founded in 2001 and is based in Taipei City, Taiwan. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/28 20:42
End of Day Share Price2020/02/28 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.