01.11.2001
UWCC is planning to merge with CDIB

United World Chinese Commercial Bank (2826 ‘Shi Hua’) is considering merging with China Development Industrial Bank (2804 ‘Kai Fa’). The two companies are currently in discussions about the formation of a financial holdings company to control the industrial bank, commercial bank, insurance and securities companies formed after the merging. UWCC has expertise in consumer loans, while CDIB focuses on industrial loans. Combining the two strengths will allow expansion into new business areas. UWCC will both avoid losing business under threat during the present highly competitive banking environment, and avoid a possible take-over. UWCC had strong earnings during 2000 and closed at NT$25.7 yesterday with a P/E of about 12. We recommend BUY.
William Fong