Value
4.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 4.4 |
| P/S | 10.0 |
| EV/EBITDA | 10.0 |
| Fwd P/E | 3.9 |
| PEG | 1.5 |
- ▸Forward P/E: 30.7x
- ▸PEG: 6.68
CHT · Why this verdict
Why Chunghwa Telecom Co. (CHT) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Chunghwa Telecom is a high-quality, low-risk, cash-generative telecom whose price of $48.51 has already moved past the $40.87 analyst target, leaving no upside at the current level despite strong fundamentals.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quality is strong, with margins of 16%, free cash flow at 125% of net income and a Piotroski F-Score of 8/9. Quality breakdown | Free cash flow should continue to cover net income and margins should hold near 16% over the next 12 months. | →Stable |
| CounterGross margin and return components are weak (ROE 3.6, ROA 3.8, gross margin 3.3 on a 10-point scale), so the headline cash conversion may reflect low reinvestment rather than durable economics. | ||
Price of $48.51 is already above the $40.87 analyst target (upside of -15.8%), so the stock has no analyst-supported upside at today's level. Analyst target | Either analyst targets are raised toward the current price or the share price consolidates back toward the target over the next 12 months. | →Stable |
| CounterAnalyst targets lag; strong earnings or a higher dividend could drive upward revisions, and a stock near its 52-week high can keep rising for a long time. | ||
The stock is overbought with RSI at 76, sits 1.0% from its 52-week high, and on-balance volume is falling, which signals distribution into strength. Momentum breakdown | Price should either break out on rising volume or pull back toward the $47.17 stop level as overbought conditions unwind. | ↓Deteriorating |
| CounterThe price is above its 200-day average and the trend indicator reads strongly positive (MACD 9.4/10), so momentum can persist and overbought readings can last. | ||
Risk scores 8.4/10 with beta, debt-to-equity, short interest and volatility all rated favorably, supporting a defensive profile with a 3.3% dividend. Components | The risk score should remain above 8 and the dividend yield near 3.3% through the next 12 months. | ↓Deteriorating |
| CounterLow volatility is already priced in at a forward P/E of 30.9x and a PEG of 6.73, so defensiveness does not protect against multiple compression. | ||
Latest quarterly revenue of 60.99 billion is up from 56.40 billion a year earlier, a steady but modest pace consistent with a growth score of 3.7. Revenue quarters | Quarterly revenue should reach the 61.8 billion next-quarter estimate and keep growing year over year. | →Stable |
| CounterGrowth of this size does not justify a forward P/E of 30.9x, and the revenue figures are provisional, so any slowdown would hit an already full valuation. | ||
Quality is strong, with margins of 16%, free cash flow at 125% of net income and a Piotroski F-Score of 8/9.
→StableQuality breakdown
- Expectation
- Free cash flow should continue to cover net income and margins should hold near 16% over the next 12 months.
CounterGross margin and return components are weak (ROE 3.6, ROA 3.8, gross margin 3.3 on a 10-point scale), so the headline cash conversion may reflect low reinvestment rather than durable economics.
Price of $48.51 is already above the $40.87 analyst target (upside of -15.8%), so the stock has no analyst-supported upside at today's level.
→StableAnalyst target
- Expectation
- Either analyst targets are raised toward the current price or the share price consolidates back toward the target over the next 12 months.
CounterAnalyst targets lag; strong earnings or a higher dividend could drive upward revisions, and a stock near its 52-week high can keep rising for a long time.
The stock is overbought with RSI at 76, sits 1.0% from its 52-week high, and on-balance volume is falling, which signals distribution into strength.
↓DeterioratingMomentum breakdown
- Expectation
- Price should either break out on rising volume or pull back toward the $47.17 stop level as overbought conditions unwind.
CounterThe price is above its 200-day average and the trend indicator reads strongly positive (MACD 9.4/10), so momentum can persist and overbought readings can last.
Risk scores 8.4/10 with beta, debt-to-equity, short interest and volatility all rated favorably, supporting a defensive profile with a 3.3% dividend.
↓DeterioratingComponents
- Expectation
- The risk score should remain above 8 and the dividend yield near 3.3% through the next 12 months.
CounterLow volatility is already priced in at a forward P/E of 30.9x and a PEG of 6.73, so defensiveness does not protect against multiple compression.
Latest quarterly revenue of 60.99 billion is up from 56.40 billion a year earlier, a steady but modest pace consistent with a growth score of 3.7.
→StableRevenue quarters
- Expectation
- Quarterly revenue should reach the 61.8 billion next-quarter estimate and keep growing year over year.
CounterGrowth of this size does not justify a forward P/E of 30.9x, and the revenue figures are provisional, so any slowdown would hit an already full valuation.
Per-dimension breakdown
Quality
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.6 |
| ROA | 3.8 |
| Gross margin | 3.3 |
| Op margin | 8.6 |
| Net margin | 8.1 |
| Current ratio | 4.7 |
| FCF quality | 9.2 |
| Moat | 6.5 |
| Piotroski F | 8.9 |
- ▸Strong margins: 16%
- ▸Excellent cash conversion: 125% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
3.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.5 |
| EPS growth | 2.9 |
Momentum
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 7.5 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 75)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.9 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%Peer rank
7.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.3 |
| quality rank | 7.1 |
| growth rank | 7.9 |
- ▸Best-in-class margins
- ▸Conservative debt levels
Technical
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 1.4 |
| 52w position | 9.8 |
Risk (lower is worse)
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.7 |
| days to cover | 6.1 |
| volatility | 9.1 |
| put call | 10.0 |
| implied vol | 5.6 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 9.6 |
- ▸Above max pain $40
Catalyst
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 3.0 |
| dividend safety | 6.7 |
- ▸Earnings in 6 days
- ▸Dividend: 3.3%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.3<4.5
- ASYMMETRY:-2.6=NEGATIVE
- EARNINGS_PROXIMITY:6d<=7d
Warning (0)
none
Reward-to-Risk
-2.58
Upside
-15.7%
Downside
6.1%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.3<4.5, ASYMMETRY:-2.6=NEGATIVE, EARNINGS_PROXIMITY:6d<=7d) reinforce the read. Current asymmetry R:R is -2.58 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.9, Peer rank at 7.1, and Quality at 6.3; the weakest are Growth at 3.7, Momentum at 4.3, and Technical at 4.4. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of -2.58 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Analyst Target Already Exceeded
Trip ifAnalyst target rises above $51, giving more than 5% upside from the current $48.51.
- P2High Quality Cash Conversion
Trip ifFree cash flow falls below 80% of net income from the current 125%.
- P3Overbought Near 52 Week High
Trip ifMomentum score rises above 7 from the current 5.0 with price making new highs on rising volume.
- P4Low Risk Conservative Balance Sheet
Trip ifRisk score falls below 6.0 from the current 8.4.
- P5Modest Revenue Growth
Trip ifQuarterly revenue falls below 56.4 billion, the year-ago level, from the current 60.99 billion.