TUNEINS (5230) : Better prospects for Tune Ins in 2015, says CIMB Research
KUALA LUMPUR: CIMB Equities Research said Tune Ins Holdings Bhd’s net profit for the nine months ended Sept 30, 2014 (9M FY14) was below expectations at 64% of its full-year forecast and 65% of consensus.
“This was because we had under-projected the claims ratio; hence, we raise the ratio from 30% to 34% for FY14,” it said on Tuesday.
CIMB Research said this led to a drop in its FY14 earnings per share (EPS) forecasts and dividend discount model (DDM) based target price (cost of equity of 9.2%; long term growth of 5%).
However, its FY15-16 numbers were unchanged.
“Despite the weaker-than-expected 9M results, we are unwavering on our Add recommendation on Tune, as the potential re-rating catalysts are intact, including 1) the swift expansion of its travel insurance business in the region, with the new market in the Middle East, 2) the growth prospects in the non-life insurance market in Thailand and 3) more tie-ups with other airlines,” it said.
CIMB Research said Tune Ins was impacted by the political unrest in Thailand and high inflation in Indonesia.
“We envisage better earnings prospects for Tune in 2015 due to 1) the improving economic conditions in Thailand and Indonesia and 2) full-year contributions from the associate companies in Thailand and the Middle East. Also, the expansion of the TI business could help to lower its claims ratio,” it said.
KUALA LUMPUR: CIMB Equities Research said Tune Ins Holdings Bhd’s net profit for the nine months ended Sept 30, 2014 (9M FY14) was below expectations at 64% of its full-year forecast and 65% of consensus.
“This was because we had under-projected the claims ratio; hence, we raise the ratio from 30% to 34% for FY14,” it said on Tuesday.
CIMB Research said this led to a drop in its FY14 earnings per share (EPS) forecasts and dividend discount model (DDM) based target price (cost of equity of 9.2%; long term growth of 5%).
However, its FY15-16 numbers were unchanged.
“Despite the weaker-than-expected 9M results, we are unwavering on our Add recommendation on Tune, as the potential re-rating catalysts are intact, including 1) the swift expansion of its travel insurance business in the region, with the new market in the Middle East, 2) the growth prospects in the non-life insurance market in Thailand and 3) more tie-ups with other airlines,” it said.
CIMB Research said Tune Ins was impacted by the political unrest in Thailand and high inflation in Indonesia.
“We envisage better earnings prospects for Tune in 2015 due to 1) the improving economic conditions in Thailand and Indonesia and 2) full-year contributions from the associate companies in Thailand and the Middle East. Also, the expansion of the TI business could help to lower its claims ratio,” it said.
