Quick take: LPI Capital shares tick up after reporting its Q4 results


KUALA LUMPUR: LPI Capital Bhd , which reported its latest quarterly results yesterday, saw its shares up marginally in early trade Wednesday.


The insurer is the second top gainer on Bursa Malaysia, rising 1.22%, or 30 sen to RM16.58.


LPI reported a marginal 0.1% increase in its net profit to RM314.05mil in the financial year ended Dec 31, 2018 (FY18) from RM313.80mil in FY17.


Its FY18 revenue increased by 2.9% to RM1.51bil from RM1.47bil. Profit before tax increased marginally to RM405.96mil from RM403.75mil.


It rewarded shareholders with a proposed dividend of 42 sen a share for the fourth quarter FY18 and for the financial year, the total dividend was 68 sen.


In Q4 FY18, LPI's revenue increased by 7% to RM389.02mil from RM363.50mil a year ago.  Profit before tax rose marginally to RM110.87mil from RM110.70mil partly due to increase in claim costs, especially in medical and motor insurance classes.


MIDF Research said LPI’s FY18 core profit results came in within expectations.


It said  LPI Capital reported FY18 core earnings of RM314.0mil, posting a marginal increase of 1.0% year-on-year (yoy).


“Accordingly, this translated to 103.1% and 101.4% of ours and consensus’ full year estimates. The group also posted a slight growth of 1.1%yoy in its 4QFY18’s core earnings to RM84.0mil,” MIDF said.


The research house has revised the earnings forecast of FY19 downwards from RM358.0mil to RM335.0mil,representing a 6.41%yoy adjustment in view of the increased competition in the industry upon liberalisation of both motor and fire insurance and greater pricing pressure.      


“In light of our earnings revision, we adjust our target price to RM16.10 (from RM16.70). We peg its FY19F Core EPS to PER of 19x (5-year historical average),” MIDF said.


Stock on the Move , LPI Capital