Mega Financial: Premium Rating for Eroding Fundamental Trends

Global Bank Equity Specialist, Creative Portfolios

Paul Hollingworth

Global Bank Equity Specialist

Creative Portfolios

Thematic (Sector/Industry)

Taiwan Financials / Thematic (Sector/Industry)

Low-margin Taiwan has been a happy hunting ground for investors in recent years with regards to bank stocks.The market is relatively less interesting today though analysts often cite defensive qualities.Our PH Score™ shows a market with subpar fundamental momentum and quite elevated valuations relative to APAC. Value-quality characteristics are just not as good as they were not so long ago and compare unfavorably to jurisdictions such as Vietnam, Pakistan, the Philippines, Thailand, South Korea or China despite some value-trap risks.Given the geopolitical risks, in the aftermath of Hong Kong,  we see little reason to pay a premium for low-margin, mediocre profitability.

Low-margin Taiwan has been a happy hunting ground for investors in recent years with regards to bank stocks.The market is relatively less interesting today though analysts often cite defensive qualities.Our PH Score™ shows a market with subpar fundamental momentum and quite elevated valuations relative to APAC. Value-quality characteristics are just not as good as they were not so long ago and compare unfavorably to jurisdictions such as Vietnam, Pakistan, the Philippines, Thailand, South Korea or China despite some value-trap risks.Given the geopolitical risks, in the aftermath of Hong Kong,  we see little reason to pay a premium for low-margin, mediocre profitability. 

Taiwan Banks: Subpar Value-Quality