• A dominant player in the local travel insurance segment. TUNEPRO (listed in Feb 2013) is mainly involved in the provision of various general and life insurance products in Asia Pacific. The company offers a range of online insurance products, including travel, lifestyle protection, and guest personal accident insurance products. The group currently captures a strong niche in the travel insurance segment with approximately 70% market share of local travel insurance, riding on its sister company, AIRASIA’s low cost carrier’s aggressive network expansion into new markets.

• Undemanding valuations. TUNEPRO corrected 16.9% from a 52-week high of RM1.72 on 25 Jul to end at RM1.43 yesterday. Currently, the stock is trading at 11.5x FY17 P/E and 2.2x P/B, which are 34% below its historical average (since debut) of 17x and 33% below its historical P/B of 3.3x, respectively, supported by decent yields of 3.5-4.2% and 12% earnings CAGR for FY16-18.

• Potential downtrend reversal. We believe a floor has been established near RM1.36-1.40 (5 Dec low) following the uptick in hourly chart and bullish Harami formation in daily chart, indicating potential downtrend reversal. We believe such valuations and grossly oversold positions have priced in most of the negatives, providing sufficient margin of safety to cushion further plunge in sharp share.

• A decisive breakout above the immediate resistance of RM1.51 (200-d SMA) will likely to lift share prices higher towards RM1.60 (100-d SMA) and our LT objective at RM1.72. On the flip side, key supports are RM1.40 and RM1.36. Cut loss at RM1.33.

Source: Hong Leong Investment Bank Research - 7 Dec 2016