On May 2nd, the New Taiwan Dollar skyrocketed by 3%, marking its largest single-day increase in history. While this boost supports capital inflow and bolsters short-term market confidence, it poses significant challenges for many export-dependent companies.

According to Fubon Investment Advisors, every 1% appreciation of the TWD reduces the overall pre-tax profits of stocks by about 0.5%, which translates to approximately NT$254 billion. With the 3% increase on May 2nd, this equates to a reduction of NT$762 billion in corporate pre-tax profits.

For example, TSMC (2330) is expected to see a profit decline of 0.4%; Hon Hai (2317) will lose NT$3 billion in pre-tax profits; ASUS (2357) will be down NT$1.3 billion, and Largan Precision (3008) will see a drop of NT$225 million. In traditional industries, Evergreen (2603) is expected to lose NT$800 million due to a 1% appreciation, while Taiwan Cement (1101) and Asia Cement (1102) face profit revision pressures.

However, not all sectors are negatively impacted. Fubon found that food and asset stocks may actually benefit. For instance, Dachen (1210) and Fengfeng (1215) may see increased profits due to foreign currency settlements for imported raw materials, while their sales are in TWD, leading to higher foreign exchange gains. Asset stocks also have the potential for net worth increases when the TWD appreciates.