CIMB Research retains Add and TP of 75 sen for Tune Protect

KUALA LUMPUR: CIMB Equities Research is maintaining its dividend discount model-based target price of 75 sen and it is also retaining its Add call on Tune Protect.

The research house had in a report issued on Thursday said the upbeat outlook was due to the expected benefits from its ongoing transformation programme.

“Potential re-rating catalysts are the pick-up in the growth of travel insurance premiums and improved claims ratio. Its valuations are also attractive at CY20F P/E of 6.3 times and P/BV of 0.8 times,” it said.

CIMB Research met up with Tune Protect CEO Khoo Ai Lin who was appointed on Jan 14.

“We are more positive on Tune following the meeting as highlighted (1) the company’s strategies, which we think would yield positive results for Tune’s financial performance, and (2) aggressive targets for the next three years,” it said.

Tune will continue to focus on three strategic pillars: The first is achieving leadership in product development and differentiation. Second is widening its distribution channels and expanding its reach and third is delivering exceptional customer experience.

The research house said the company was undergoing a transformation programme which focuses on four areas. 

They are expanding its global business beyond travel protection; AirAsia-related businesses – driving incremental growth beyond travel products and sales add-on channels (by AirAsia); Insurtech capabilities – leveraging its existing capabilities for insurtech; National business (general insurance business in Malaysia) – long-term sustainable underwriting profit for Tune Protect Malaysia.

“Under Tune's transformation programme, we are positive on its plans to diversify beyond travel insurance, as we think this segment's growth could soften in the next few years. 

“New income streams could come from fees paid by other insurers to utilise its platform for online sales of insurance products,” it said.