ALLIANZ (1163)
Allianz Malaysia Berhad (Allianz) is principally engaged in
underwriting various General Insurance and Life Insurance in Malaysia.
It is a subsidiary of Allianz SE, which holds about 65% of its shares.
The company mainly provides various commercial insurance products for
small and medium-sized enterprises with industrial risks.
Overall, Allianz is a company in the insurance sector, with major peers
TAKAFUL and LPI. At of now, the market value of ALLIANZ is about RM 2.6
bil. In terms of market value, it ranks 3rd among peers with listings.
(TAKAFUL market value RM 3.8 bil, LPI market value RM 6.0 bil)
The company has 2 main businesses, General Insurance and Life Insurance.
The business model of insurance is simply to collect the premium with
the customer, and when the customer has any accidents on the policy, the
insurance company will use the premium received to compensate the
customer.
At the same time, the insurance company will not just put the premiums
received in the bank account but will invest into other investment
platform. After calculation by a professional actuarial team, the
premiums received by insurance companies and the income from investment
often exceed the sum insured, which is how insurance companies make
profit. Of course, this is a simplified version for easy explanation. In
reality, the insurance company's model will be more complicated, but
the concepts are similar.
From FY2012 to FY2018, the company's turnover showed continuous growth,
with an average annual growth rate of 8.7%. However, FY 2019 only
released the first three quarters of results, and the three quarters of
sales have increased year-on-year, while also breaking through
historical highs. With this trend, it is not a big problem to get RM 5.5
bil for the full year turnover of FY 2019.
From FY2012 to FY2018, the company's average annual growth rate of net
profit was 10.4%. From FY 2014 to FY 2017, although the company's
turnover has continued to grow, its profit has remained at around RM 300
mil per year, which means that the profit margin has fallen slightly,
but it remains in the range of 6% -7%.
However, the profit suddenly increased by more than 20% in FY 2018
(Profit Margin also increased). According to this trend, the company's
full-year profit in FY 2019 is expected to increase by more than 20%
again. In general, ALLIANZ's turnover and profit (or even profit margin)
have increased in the past 2 years and have performed well.
Louis Yap
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