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Author: Sslee   |   Latest post: Sun, 3 Feb 2019, 1:41 PM

 

Questions for Tunepro 2020 AGM

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Subject: Questions for the coming TUNPRO 9th AGM on 4 August 2020

Dear TUNEPRO IR and Ms Lee Siew Li (Manager- Investor Services: Tricor MY/IS),

Please forward my questions to the TUNEPRO BOD for the coming AGM in advance so that BODs have time to prepare the answers.

I refer:

  1. Comment from ChoivoCapital:

https://choivocapital.com/2018/11/28/the-art-of-valuing-insurance-companies-and-why-teh-hong-piow-is-a-god-lpi/

The problem with Tunepro for me is,
1) They tried to go into general insurance, which is not their edge, travel insurance division is incredibly profitable.
2) Their fund management for the investment is quite bad, some of it is in unit trust, which are just stupid and inefficient. If you don’t know what to do, put it in the S&P500 index or smtg. The rest are in MGS.
3) Everyone sells car insurance online now. But health, life, savings plan etc those are usually not sold online. TUNEPRO is not doing anything in trying to do that. If they did, they can cut the 6% first year, 4% second year commission and cost, giving them a huge edge. But they are not. So.
It’s not about the visionary of the management, but the economics of the business first. Unless they actually know how to run an investment fund on their own and do general insurance, I find it hard to see their edge.

  1. A visibly upset Tunepro investor drkervokian comments in i3 Tunepro forum:

Management Expense as a % of Gross Written Premium is higher than other insurers.
Somebody is sitting high in their chairs without doing much work. Why?
All of that doesn't make sense for a supposedly digital company with priority sales leads from AirAsia where sales is made with mouse clicks.
Seriously.
1) Fire the distribution head - Gross Written Premiums keep shrinking. Boost it up
2) Fire the Operations head, CIO and CFO - Please push down Management expense to <30% of GWP it's now 40+% .
3) combined ratio is too close for comfort at 97%. Push it down to 95%
For a digital company with high expense ratios it's basically 2 things
-> SOmebody is making money from the IT vendors
-> Too many expensive dead weights in operations, marketing and legal

13/02/2020 12:46 AM

Distribution org structure is so inefficient. There's a Group Head, POS Head, Broking Head and a Chief Agency Officer... OMG.
How can there be so many wankers for such a small Gross Written Premium pie.Just merge Broking with Group as 1 bos. cut down the salary.
MAke sure Agency and Broking fellas share their leads and get rid of channel base rivalry.
IF they're silo makers - fire their ass.
Back in 2012 the Management expense ratio was just a quarter of what it is today.
Seriously... too many dead weights!

13/02/2020 12:59 AM

Fire the Head of Strategy role. Seriously useless for a small company like Tune.
The CEO is either a Strategist or not worth paying RM 2 mil a year.
TuneProtect needs to dig deep and realize that it needs to operate like a startup again.
A management ratio of almost 50% is just embarrassing for 9M 2019
And finally just merge the CIO and COO into 1 person. Cut down cost.
As everything needs to run on IT anyways; and besides, both these characters probably sitting around avoiding accountability of making decisions and driving business forward.
Why am I Pretty sure.
Cause else the management expense will NOT be that high!
and under them is probably an army of "assistants" that attends meetings with them.
And for all you know IT and Operations not working with each other and blaming each other on a daily basis.
So if they can't work together, just get rid of them and put in 1 person.

13/02/2020 1:06 AM

My questions:

Q1. How, what, when and where to improve on Tunpro’s fund management for the investment and to generate better investment income? (Perhaps for a start BOD can engage with ChoivoCapital Email: choivocapital@gmail.com for a fee to brainstorm a regional portfolio list for Tunepro to invest in)

Q2. Can I suggest Tunepro leverage on AirAsia big data and digital platform to cross sell: Health, Life, Saving and Education plan online to  targeted group and as incentive the 6% first year, 4% second year commission can be shared out in 50%: 25%: 25% between: (Policyholder(cash rebate): Introducer(AirAsia big point): Tunepro)

Note: No agents are required as it is done online and policyholders can just name anyone with AirAsia big point account as his introducer to get the AirAsia big point incentive

Refer: History operation revenue to management expenses and %:

  • 2019: Revenue: RM 500,801,000: Management expenses: RM 119,750,000: 23.91%
  • 2018: Revenue: RM 566,122,000: Management expenses: RM 134,642,000: 23.78%
  • 2017: Revenue: RM 542,598,000: Management expenses: RM 121,429,000: 22.38%
  • 2016: Revenue: RM 516,621,000: Management expenses: RM 107,090,000: 20.72%
  • 2015: Revenue: RM 480,193,000: Management expenses: RM 82,235,000: 17.13%
  • 2014: Revenue: RM 451,070,000: Management expenses: RM 69,886,000: 15.49%
  • 2013: Revenue: RM 388,130,000: Management expenses: RM 57,069,000: 14.70%
  • 2012: Revenue: RM 226,663,000: Management expenses: RM 30,207,000: 13.32%

Q3: What will be the optimum % Management expenses over Operation revenue? When, where, what and how to reduce management expenses and achieve this optimum %?

Refer Dividend Policy stated on 2018 annual report page (22):

Since Tune Protect Group Berhad’s listing back in February 2013, we have consistently maintained a payout ratio of above 40%. We foresee this trend to continue as our business continues to generate profits year after year whilst our capital reserves remain sturdy. The current payout ratio is expected to be sustainable as we remain in a zero gearing position with adequate liquidity to support growth and investment initiatives moving forward.

Q4: Is payout ratio of above 40% Tunepro’s Dividend Policy?

Q5: Am I wrong to base on 2018 Dividend Policy and Q4 financial report announced on 28-FEB 2020 financial end 31th 2019 EPS of 6.74 cents and bought more Tunepro shares in expecting a dividend of 3 cents?

Q6: Is it fair to shareholder no dividend was declared for financial end 31th Dec 2019 when EPS is 6.74 cents higher than 2018 EPS of 6.59 cents?

Q7: Please allow me to remind BOD and management, one of Tunepro’s core values: Respect and Trust are at the core of everything we do. Trust is what bonding Tunepro with policyholders. Is this trust extended to between BOD and minority shareholders when come to dividend?

Q8: Will Management publish the answers to my questions in Tunepro website AGM minutes or email the answers back to me?

Refer: https://www.sc.com.my/api/documentms/download.ashx?id=b59a0f5d-c414-4c27-b1c2-37ad15072d47

Where SC encourage shareholders to be prepared and participate effectively at an Annual General Meeting (AGM) with CORPORATE GOVERNANCE CHECKLIST FOR SHAREHOLDERS

Post AGM

1. Have you read the ‘Key Matters Discussed’?

Listed issuers are required to publish the ‘Key Matters Discussed’ on its website which is a description of issues discussed and outcomes decided at the AGM.

2. Do the ’Key Matters Discussed’ reflect the discussions and outcomes of the AGM accurately? The ‘Key Matters Discussed’ should not be a mere listing of resolutions and voting outcomes of the AGM.

3. Are shareholders provided with an accessible and effective mechanism to maintain communication with the company?

Q9: Since I cannot find any AGM minutes at Tunepro website hence clearly Tunepro management did not comply with above Corporate Governance in publishing the ‘Key Matters Discussed’ or AGM minutes with AGM presentation and answers to: Questions submitted in advance and questions posed to BOD during AGM on its website.

Will Tunepro management publish “2020 AGM minutes” covered any presentation and answers to questions in its website or email a copy to me?

Thank you

Best Regards,

Lee Soon Sheng

PS: An example of a well recorded AGM minutes:

MINUTES OF THE 60TH ANNUAL GENERAL MEETINGOF PETRON MALAYSIA REFINING & MARKETING BHD

(June 13, 2019)

https://www.petron.com.my/wp-content/uploads/2020/01/Minutes-of-the-60th-Annual-General-Meeting-of-Petron-Malaysia-Refining-Marketing-Bhd-June-13-2019.pdf

Covered:

PRESENTATION: Key highlights presented

Answers to: Written Questions submitted in advance by Shareholder

Answers to: Questions posed to the Board/Management from the Shareholders/Proxies Present

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Labels: TUNEPRO

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Chart Stock Name Last Change Volume 
TUNEPRO 0.355 +0.005 (1.43%) 583,800 

  Be the first to like this.
 
Philip ( buy what you understand) Why do you like lousy companies so much? Is your hobby buying bad companies just to attend AGM to scold them? Does that do anything for your wealth creation?
18/06/2020 5:00 PM
Sslee Haha,
Learned from Philip. Not everyday you can buy below IPO price (Pchem).
For Tunepro the potential is always there.
18/06/2020 5:05 PM


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