Tune Insurance growth maintains

KUALA LUMPUR: RHB Research is maintaining its “Buy” call on Tune Insurance Malaysia Bhd (TIMB) at a fair value of RM2.70 based on financial year 2015 forecast price-to-earning ratio of 20 times.

“We deem this as a growth stock that deserves to trade at a premium to the sector’s 14-20x P/Es valuations, in view of its high earnings growth, potential margin expansion and market expansion amid an Asean customer base,” it said on Friday.

Its estimates on the first quarter ended Mar 31, 2014 amounted to RM15mil were within its expectations of 18-19%.

Moreover, its sales was affected by Thailand’s political deadlock in January but online sales bounced back from February to March this year. 

The online business recorded a high 31% year-on-year profit growth, which accounted to RM14.8mil

TIMB booked RM3mil in its first quarter on a low underwriting margin of 7.7%. 

“The temporary dip in TIMB’s underwriting results caused Tune Ins’ combined (claims + expense) ratio to nudge up to 82% in 1Q14, above the average of 77% since FY11,”it said. 

However, it expects to margins to return and attain better performances ahead.
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