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Hello, investors. Welcome to the earnings call of E.SUN Financial Holding Company of Third Quarter 2024. The time is 8:00, Taiwan Time, so we will start I'm Chiwei, I will be the moderator of the conference today. And alongside with me, we have Alex Chiu and Martin Lin, who are my colleagues in Investor Relations. First of all, I would like to invite Vice CFO, Ms. Sarah Chen, for a brief opening note.
Hi, dear investors. Good day. E.SUN has delivered a record-breaking performance in the first 3 quarters of 2024. Surpassing previous year, net fee income reached a new record high in the first 9 months. Wealth management fees also hit a record high, driven by a robust investment market and strong demand for mutual funds, insurance and overseas bonds.
Our brokerage business also thrived with a 77% year-over-year increase in profit. This segment now contributes 8% to our total profit. With our diversified revenue streams, we are confident in the sustainability of our future earnings.
We delivered positive results in cost control. Operating expenses in the first 9 months grew at a more moderate pace of 8.3% year-over-year, resulting in a CI ratio of 51.2%. We remain committed to disciplined expense management throughout the year. We continue to expand our international footprint. In October, we opened a sub-branch in Kumamoto, Japan, to better serve Taiwanese businesses and their supply chain. We're also pursuing opportunities in North America with applications for a branch in Toronto, Canada and a representative office in Dallas U.S.A. For the fourth consecutive year, E.SUN has hosted ESG's sustainability initiative bringing together over 160 corporations from Taiwan and abroad, including Vice President, Hsiao and representatives from 5 countries.
We remain steadfast in our commitment to environmental sustainability and will continue to partner with businesses to promote sustainability practices. Thanks for your attention.
Thank you, Sarah. And next, I would like to hand over to Alex. He will walk us through the presentation, and then we will start to take the questions.
Dear investors, for the following presentation, we'll begin with the Financial Holding summary, which is on the Page 1. For the Financial Holding Company's total assets by the end of September, it's TWD 3.9 trillion. As for the bank is TWD 3.89 trillion. The growth rate for the holding company and the bank year-on-year is 9% and the security house was also delivered very strong growth in assets. For the key financial indicators, the book value per share by the end of September is TWD 15.47 per share and double lever ratio of 108.54% and the holding company's cost ratio, we do not disclose the quarterly indicator. So it remains to be the same as what we disclosed in the first half. For the physical channel for domestic -- domestically for our branch in bank still remain at 139 branch.
And for overseas channel, we just opened the Kuala Lumpur Rep Office this July that makes E.SUN's overseas presence to be 33 operating sites in 11 countries and regions and the branches for security house remain unchanged.
On Page 2 is the business and financial review for the first -- third quarter. For the first 3 quarters, the revenue for the holding company was reported to be TWD 58.6 billion, grew by 21.6% and a net profit was TWD 20.9 billion grew by 31.5% and both, we set a record high for the same period. And it's worth mentioning that for the single quarter, third quarter, the net profit was TWD 8.2 billion. That has made them quarterly high and also the fifth consecutive quarters to be positive growth.
And EPS for the financial holding company will be 1.31 and ROE is 11.51%, ROA is 0.74%. For subsidiaries, the E.SUN Bank reported a net profit to be TWD 19.5 billion, grew by 39.7%. And E.SUN security house reported net profit to be TWD 1.7 billion, grew by 77%, which is very strong growth. And both entities has set a record high for their profitability.
For business development, by the end of September, our loan balance has grew by 13.6%, in which the corporate grew by 12.9% and the foreign currency loan grew by 12.8%. On the net fee income, we reported another record high to be TWD 20.5 billion. The growth rate was 30.3%, out of which the wealth management fee was TWD 3.5 billion for the single quarter. In the first 9 months, it will be TWD 9.8 billion. The growth rate was 42.9%, which is another record high.
And for credit card fee was TWD 5.8 billion, the growth rate was 10.3%, and the consumption for our credit card was another record high. While E.SUN still expand our business, our asset quality was quite benign. Our NPL ratio is only 16 basis points and coverage ratio is at a level of 766.62%.
For the business highlight of this quarter, we opened the Kuala Lumpur Rep Office in July. And last month, in October, our Kumamoto Sub-Branch opened that makes E.SUN a 3-operating sites in Japan. And also, we have filed the application for our regulator for the Dallas Rep Office in the United States. And we also get the approval from the regulator.
And also, there is some good news to share with our investors. E.SUN has been awarded as the winner by the Taiwan Academy of Banking and Finance in Corporate Banking, Human Resource Development and Digital Banking categories. And also, we have been awarded by the banker for the most innovative digital bank in Asia Pacific.
On Page 3, you can see that we used 4 graphs to illustrate our financial success in the first 9 months. For the net profit was another record high, and EPS is 1.31 and both ROE and ROA are also the highest in the past 5 years. By the end of September, our ROE is 11.51%, and ROA is 0.74%. Compared to what we reported in the first half, there is a significant improvement in both ROE and ROA, and we will continue to grow these figures.
On Page 4, you can see the contribution by subsidiaries in terms of our net income. E.SUN Bank continues to be the main subsidiary for the holding company, which contributed 91.5% of the profit, and the security house is 8%, and the rest will be contributed by the venture capital. On the right-hand side, you can see that the growth momentum from the bank and the security are quite strong this year.
On Page 5, you can see the net profit breakdown compared to the same period last year. E.SUN has followed a golden rule of our growth in terms of our business, that is the growth rate of net profit will be higher than the growth rate of net revenue of which were higher than the growth rate of OpEx. So this year, we are happy to see that we are following this golden rule, and we'll continue to expand our business in this way.
On Page 6 is the revenue breakdown for the holding company. And for the net interest income contributed 42.5%. Net fee income was 35% and the rest would be -- the rest 22.5% will be contributed by the fixed income and others. On the right-hand side, you can see that across all the revenue generators that we delivered double-digit growth and also for the fixed income and others, we turned to be positive in this quarter.
On Page 7 is the net -- the breakdown of net fee income. And out of the TWD 20 billion fee income, wealth management and credit card continue to be the 2 largest contributors. Wealth management contributed 47.6% and credit card 28.4%. On the right-hand side, you can see that both credit card, wealth management and brokerage are all double-digit growth by the end of September.
On Page 8, you can see the breakdown for our wealth management fee. This year, on the right-hand side, you can see that across all the product lines, including mutual funds, bancassurance, bond and others and also custodian and trust, we all delivered double-digit growth. And out of which bancassurance following what we delivered in the past 2 years, 2 years ago, the growth rate for bancassurance nearly 30%. And last year, it will be 20%. And this year, by the end of September, the growth rate for bancassurance has grew to 18.6%. And also for the venture fund, we are seeing a nearly double growth this year.
On Page 9, you can see the credit card business breakdown. There are 4 indicators that we measure our business in credit cards that will be active cards, card consumption, per cost spending and gross fee income. As you can see that the card consumption by the end of September, the growth rate is 11.9%, and our market share has grew up again to 13.4%.
On Page 10 is the overseas business development. By the end of September that our overseas branches and subsidiaries profit grew by 15.7%. That has contributed 31.3% bank's net profit. And for the overseas, loan balance has grew by 17.8%. So the overseas strategy will be -- still be the very important strategies for E.SUN to growth in the future.
On Page 11 is the deposit loan structure. As you can see in the first line, the total deposit year-on-year growth rate is 9%. And across Taiwan dollar and foreign currency dollar, we all delivered very decent growth. And for the total loan, the growth rate is 13.6%. And this quarter, we indicated that the gross -- the loan by currency. For Taiwan dollars, loan is 13.8%, and foreign currency loan is 12.8%. If we see this loan divided by different business lines, our corporate loan is 12.9%, consumer loan is 14.9%, both at the double-digit growth level.
On Page 12, it's loan portfolio. On your left-hand side, you can see that E.SUN still keep a very balance in corporate loan and personal loan. For corporate loans, SME is 25.9% and large corporate is 21.1%. Also for the mortgage is 24% and security personal loan is 20.7% and the rest will be unsecured personal loan and subsidiaries. And on the right-hand side, you can see that across all the major loan business, we delivered a positive growth this year.
On Page 13, loan-to-deposit ratio, for the overall loan-to-deposit ratio has gone high to 71.1%. And for the NT dollar LDR, it has gone high to 88.6%, and the foreign currency LDR will be 37.2%.
On Page 14 is the NIM and spread. This quarter, we report our NIM to be 1.28%, the same level as what we reported in the second quarter. And on your right-hand side is the spread. We're happy to see that there is a 5 basis point increment compared to what we reported in the second quarter.
Our spread is 1.27%. And the growth and the incremental was benefited from both the loan side and also the funding cost. The funding cost decreased by 1 basis point, while our loan yield has gone 4 basis point increment.
On Page 15 is the asset quality. Our asset quality -- NPL ratio remained very -- at a very benign level and also coverage ratio at a very adequate level. On your right-hand side, you can see is the credit cost. It has been 18 basis points till the end of September.
On Page 16 is the NPL ratio across different business lines. For corporate, it has been 17 basis points and mortgage is only 7 basis points.
On Page 17 is the cost-income ratio. By the end of September, our cost-income ratio is 51.2% compared to what we had in previous year, there is a significant improvement in the cost income ratio, and we'll continue to optimize this ratio to optimize our operating efficiencies.
On Page 18 is the capital adequacy ratio. In the first half, our financial income ratio is 128%, and the bank's BIS ratio is 14.98%.
On Page 21 will be the initiative that we had for the fourth consecutive year that will invite more than 160 corporate clients to call for sustainable development. And this year, we also invite our Vice President, Hsiao. Hsiao has attended the meeting in person to show the determination from the government to the sustainable development goal. And that will be the end of the presentation and we will head into the Q&A section.
Thank you, Alex, and we will proceed to the Q&A.
[Operator Instructions]
Okay, investors. Now we have 3 questions on the queue. The first 1 is what is the loan growth and fee income outlook for next year?
I have to apologize that we haven't finalized our budget for next year till the fourth quarter earnings call and February next month, we will disclose our guidance for loan growth and fee income growth. But what I can give you now is, if you look at the history of E.SUN, we could always maintain a loan growth at high single digits. And also as what we see in the wealth management market. The outlook for next year we still remain positive -- quite positive for the wealth management and for the credit card. So that is also our view on fee income growth for the next year.
And the second question is the sensitivity to NT dollar and U.S. dollar rate cut.
I think for the past few years, we actively adjust our funding cost. And due to the market condition, it's quite uncertain, as you can see, [indiscernible] won the election, but that brings another uncertainty for the future market, especially for the U.S. strategy and their policy. So we fund it is very difficult to predict the sensitivity in new Taiwanese dollar or in U.S. dollar because we can act -- part of our goal is to actually come show our cost of funding. But in the other way, we are trying to maximize our returns, both on loan and investment. So we think it is hard -- very hard to predict.
For the third question is the FSLDR for next year. At this moment, our FSLDR is around 37%. For next year, our target hope to reach at 40%, and we will try very hard to make this goal.
Now we have the next question coming in. The question is about wealth management. We see strong momentum in the wealth management fee income. And when will the visibility last till?
Okay. For the wealth management, in the first 10 months of this year, we have 7 months out of 10 months. The wealth management fee income surpassed TWD 1 billion before this year, we never had 1 single month to have the wealth management fee income more than TWD 1 billion. So that kind of explains the performance of wealth management business and the growth that we demonstrated this year. I think the main point of difference for this year is our strategy to focus on bancassurance and it started to pay back to the fee income. For the past -- in the past 2 years, our fee income from bancassurance, it was 25%, then 35%.
And this year, we once again delivered a double-digit growth until September, 19%. And our strategy is to increase -- to enhance the bancassurance fee income proportion to be more than 40% of the overall wealth management fee income. The reason why we do that is because the bancassurance is less sensitive, less sensitive to market volatility. So it will form a very solid foundation for our wealth management fee income. And we will continue to increase the proportion of bancassurance, and we are quite positive on that. The reason being first on the product offerings, we try to enrich our product offering and to increase the insurance company partners to provide more products to fulfill the demand, the need of our customers.
And secondly is our wealth -- our financial consultants, they are getting more and more familiar with the skills to sell bancassurance products and to target the right customers to sell the bank -- to sell the insurance policy, and they started to replicate their successful experience. So that will give us more and more momentum on the bancassurance sales. And in terms, it will help us to increase the wealth management fee income.
And we have the next question coming in. It's about NIM and spread. In the third quarter, we see an improvement in spread and the NIM is flat. So what is the outlook for the fourth quarter of NIM spread for E.SUN.
Well, I think for the NIM and spread forecast, our forecast will remain at flat to a small -- and probably have more a few bps to be up. The reason is that for the spread for our loan portion, our NT dollar loan portion is larger than the access loan portion. Since Taiwan Central Bank hike the required reserve rate, so which will cause a squeeze in the funding market. Therefore, we still have room to adjust the loan yield. So that will house our spread to be up. Also fair cost rate in September, but we also see the loan demand in FS loans, the demand is more and more.
So we think the spread still have room to be stable or have a few bids to be up. For the NIM side, since the Trump win the U.S. presidential elections, so maybe we think the rate will not be for as much as we previously think. So there's a positive for our FS swap and the bond investment. So for the NIM side, we think probably, we still have a little bit to be up. So that's our forecast.
So thank you, investors. There is no more questions coming in. So I think we can call it a day. Thank you for your participation, and we look forward to meeting with you in the next -- in the earnings call next quarter. Thank you. Bye-bye.