英文【高盛】2025年第一季度业绩回顾，股价表现后下调至中性评级

We downgrade Cathay FHC from Buy to Neutral. Share price has rebounded 33% from its April low, driven by larger-than-expected FY24 dividend. Share price performance also benefited from a stable NTD, following the sharp appreciation in early May. Having said that, we believe the div yield tailwind is mostly priced in, and see more uncertainties to FY25 profit, as our economists expect NTD/USD to appreciate further, c.5% to 28.5 over the next 12 months. While company reported sensitivity to FX movement was lower than our estimated sensitivity, we note that a 5% appreciation from current level could introduce downside risks to our below-consensus FY25 profit and, in turn, to FY25 dividend. We see a more balanced risk/reward, with Cathay FHC FY25E div yield now broadly in line with sector average. Since being added to Buy list on May 22, 2017, the stock is up 37%, compared to its insurance-centric FHC peers +94%, bank-centric FHC peers +113% and TAIEX +117%. Thomas Wang +852-2978-1697 | thomas.wang@gs.com Goldman Sachs (Asia) L.L.C. Simone Chen +852-2978-0619 | simone.chen@gs.com Goldman Sachs (Asia) L.L.C.Cathay Financial Holding (2882.TW): 1Q25 Earnings Review, downgrade to Neutral after share price performance25 May 2025 | 10:54AM HKT Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html. Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S. 1Q results review: On impact of NTD appreciation: Lower FX sensitivity: Cathay noted that net FX exposure is around NT$500bn at of n1Q25, after netting off FX policy reserve and CS/NDF and proxy hedge. For every 0.1 appreciation of NTD (vs. USD), there is a NT$630mn impact on profit, after allowing for 60% offset using FX reserve. Roughly, this implies for every 1% NTD appreciation, it would reduce net profit by c.NT$2bn. This is smaller than FY24 sensitivity, where every 1% NTD appreciation would reduce profit by NT$7.6bn (before FX reserve offset), or c.NT$3bn after allowing for 60% FX reserve offset. Maintain FX25 hedging cost guidance of 1-1.5%: Cathay attributed the reduced nsensitivity to an increase in hedging, starting during 2024. Cathay noted that the company tactically utilized more NDF hedging when the cost was c.2% p.a. in 2024. As a result, the company was able to realize some gains on existing NDF contracts in 2025, to help to contain overall hedging cost (0.8% in 1Q25). New FX reserve rules could help to offset near-term profit volatility: Cathay has napplied to implement new FX reserve rules. If approved in time, it could be used to offset the negative pr