Allianz expects its insurance business to grow further.
KUALA LUMPUR: Allianz Malaysia Bhd
is set to continue on its growth path with expectations that more dividends could be paid out in the quarters ahead.
The company’s net profit for the first quarter of financial year 2023 (1Q23) grew 15% year-on-year (y-o-y), outperforming analysts’ expectations.
Moving forward, Allianz expects its insurance business to grow further.
“Given Allianz’s strong market share, we believe that general business will remain solid while annualised new business for life insurance will continue to outperform the industry’s growth, driven by employee benefit business and bancassurance,” TA Research said.
The research house has maintained its “buy” call on Allianz with an unchanged target price of RM15.20 per share based on a sum-of-parts valuation.
Maybank Investment Bank (IB) Research said Allianz’s first-quarter results were above expectations, mainly due to its higher-than-expected investment income.
“What was a positive surprise was the declaration of a maiden first-quarter interim dividend of 31.5 sen per share, which is 37% of our full-year dividend forecast and it does look like this is the start of quarterly dividend payments,” it said.
Maybank IB Research has maintained its “buy” call and forecasts a RM16.75 target price, noting that higher dividend yields of 6% or more provides support for its shares.
“Allianz’s first-quarter earnings were above our expectations at 35% of our full-year forecast, driven primarily by higher investment returns, which jumped 115% y-o-y.
“With the adoption of the Malaysian Financial Reporting Standard (MFRS) 17, the financials are not entirely comparable to historical data. We maintain our forecasts for now,” Maybank IB Research said.
Meanwhile, RHB Research said it continues to like Allianz for its strong brand equity, market presence and its solid environmental, social and governance credentials.
It has maintained its “buy” call and raised its target price to RM16.70 from RM16.40 on the stock, saying that it will update its model post-results season to factor in the MFRS17 standards adjustments.
