代號 名稱 現金/股票(元) 市值(億)

1707 葡萄王 1.2/ 0.0 26

2615 萬海 2.2/ 0.5 491

3073 普格 1.0/ 1.0 15

5356 協益 0.2/ 0.0 11

5384 捷元 1.4/ 0.0 13

5519 隆大 0.5/ 0.0 18

6214 精誠 1.0/ 0.0 82

6243 迅杰 3.8/ 0.5 82

8917 欣泰 0.9/ 1.3 34

台股週四震盪擴大指數開低走高，早盤在台積電跌停的恐慌氣氛影響，指數再創波段新低來到7115點，但本波主跌的中小型股則逆勢走強，逢低搶短意味濃，終場加權指數以上漲40.24點收於7394.10點，成交量放大為1211.15億元；短期觀察指標為國際股市能否止跌回穩及融資餘額可否降至3000億；指數下檔支撐7100點，上檔反壓7530點。

• . KMT' s election victory opens a new chapter in cross-strait relations; tourism sector is set to benefit. Following the Koo-Wang talks in 1993 and former KMT leader Lien Chan' s visit to China in 2005, the deregulation of China policy in terms of direct flights across the Taiwan Strait and the influx of Chinese tourists to Taiwan is finally set to begin on July 4, 2008. We attribute the rapid deregulation to the KMT' s presidential election victory, as the new president is under pressure to implement his campaign promises. With initial weekend charter flights numbering 18 and up to 3,000 Chinese tourists per day, we expect hotel and airline operators to benefit at the initial stage.
• . Limited economic benefits in the short-term; long-term impact may be great. Total spending by Chinese tourists in Hong Kong reached HK$59bn (NT$229bn, US$7.6bn) in 2007, accounting for 3.6% of HK' s GDP. If Chinese tourist spend similar amounts in Taiwan, the HK$59bn would in turn translate into a 1.7% GDP contribution to Taiwan in the long run. However, we are looking into more economic benefits beyond the influx of Chinese tourists. We believe that direct flights are the key to restart Taiwan' s economic engine, with Chinese tourists first helping domestic consumption, followed by capital flowing back into Taiwan from local businesses that moved to China in the 1990s.
• . We see a boon in Taiwan' s hotel sector in terms of room and occupancy rates. We expect some NT$9.3bn in tourism revenue to flow into the hotel sector under the assumption of 3,000 Chinese tourists per day. We also expect both room and occupancy rates to pick up significantly in 2009, following HK' s experience. HK recorded a 19% YoY room rate increase the year after it opened to individual visits by tourists from China. It also experienced an occupancy rate hike from 70% in 2003 to 88% in 2004. In 2007, 15.5mn Chinese tourists visited HK, and compared to the 81,835 Chinese tourists who visited Taiwan during that period, there is plenty of room for growth in both rates.
• . Raising fares and higher surcharges stop the bleeding; airlines ready to take off with direct flights. With multiple fuel surcharge adjustments in 2Q08 and an anticipated 30% fare increase in 3Q08, we expect Taiwanese carriers to end their losses in 2H08. Direct flights will begin in July with weekend flights only at the initial stage, but the skies would open up to more air traffic after the Beijing Olympics in August. As China Airlines (2610 TT/Buy/NT$12.65) is trading below 2009E book value and EVA Airways (2618 TT/Buy/NT$13.0) is trading at 1.2x of 2009E book value, we believe both companies offer exceptional value to investors as the earnings growth on direct flights has not been priced in properly by the market. . Names we like are Ambassador Hotel and Formosa International Hotel. We favor Ambassador Hotel (2704 TT / NR / NT$41.4) and Formosa International Hotel (2707 TT / NR / NT$513.0) in light of their sound corporate governance as well as possible earnings growth over the next few years. We also favor these two companies as their hotels have facilities in those remote areas where Taiwan' s most popular attraction located. Ambassador Hotel currently trades at an 8.1% premium to its NAV per share of NT$38.3, while Formosa International Hotel trades at a 3.4% premium to its NAV per share of NT$496.2. . Tourism sector outperforms other major sub-index year-to-date; recent correction to justify stretched valuation. The tourism sub-index had a 37% increase year-to-date, outperforming other major sub-indexes. We attribute this to the high expectation of economic benefits that Chinese tourists would bring to this sector. However, in a regional valuation comparison, we find that the valuation is overstretched for Taiwan tourism players. Therefore, the catalyst is priced in, in our view. We expect the sector to see more correction in order to justify its valuation with regional peers, but we remain positive on Ambassador Hotel and Formosa International Hotel in the long-term despite their currently stretched valuations.