A Market Value Assessment and Performance Analysis on Financial Holding Companies and Their Major Subsidiaries, Taking the 14 Financial Holding Companies in Taiwan as Example

• Main Authors: Kuo-Hsin Hu, 胡國信
• Other Authors: Sheng-Yung Yang
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/51290608343061204385

碩士 === 國立中興大學 === 高階經理人碩士在職專班 === 94 === Abstract In this dissertation, we used fourteen financial holding companies in Taiwan and worked out their MVA (Market value-added) and CER (Cumulative excess return) on the basis of financial information and stock prices of the companies since their inception until 2005. In the meantime we have conducted an analysis on the major subsidiaries of these financial holding companies on the basis of their EVA (Economic value-added) and financial performance. The purpose of this study is to evaluate whether the performance of the financial holding companies, in terms of their market value, has met the expectation and vision of the Company at the time of establishment. Our findings show that most of the financial holding companies and their major subsidiaries have satisfactory performance in terms of profit making, which leads to an increasing trend in EVA. The total market value of most of the financial holding companies is rising; the MVA also marks an increasing trend. These facts evidence the positive response from the market toward the establishment of these financial holding companies. Most of the companies have a significant CER value, which also shows an upward moving trend. In other words, the emergence of these financial holding companies has positive impact on the return from the stock market, which leads to the upward movement of the CER from the company’s shares. It also implies that investors hold positive views toward the establishment of financial holding companies, which, they believe, has caused multi-facet effects and facilitated the development of economy of scale. Through the financial analysis, it has also been found that, apart from good profitability and operating efficiency, the financial holding companies also demonstrated better performance in terms of capital adequacy, liquidity ratio and business growth. The results of our integrated analysis shows that, whilst the establishment of the financial holding companies does not bring about a consistent performance in all aspects, it does have positive impact on the elevation of corporate value and improvement of operating efficiency for most of the companies. The difference in individual performance, on the other hand, is believed to have close interrelationship with the management team, management strategy and corporate governance of these companies. This leads to the conclusion that the efforts made in expanding the scale and diversifying the business scope of the industry has been a practical solution in Taiwan. They contribute to the improvement of the fundamental structure of the financial industry and the elevation of the business value, and in the meantime help to expedite the internationalization process and strengthen the competitive advantage of the country.