Profile. With its tagline “Insurance Simplified”, Tune Protect (listed in Feb 2013, TUNEPRO) offers an array of affordable protection plans to suit individual, SME and corporate needs via its insurance, reinsurance and marketing arms in Malaysia, Thailand and the United Arab Emirates. TUNEPRO has established a strong foothold in the travel, lifestyle, health and digital insurance space globally with a presence across more than 60 countries through strategic partnerships with local underwriters in these markets.

Roadmap ahead. TUNEPRO continued to experience favourable claim experience especially in the Motor segment and expect this trend to prevail in the coming quarters. In addition, it will continue to strive for further diversification, by focusing on three main pillars namely, Health, Lifestyle and SME, and will gradually exit the Commercial segment (over the next 3 years) since it doesn’t fit into the overall strategy. Meanwhile, as the group continues to focus on rationalisation of business composition, it is now less reliant on AirAsia for growth (makes up <5% of top-line vs last time c.40-50%). That said, AirAsia’s large database provides future cross-selling opportunities.

Poised for an overhead resistance breakout. TUNEPRO is trading at 8.6x FY22E P/E (19% lower than its peers) and 0.62x P/B (65% lower than its peers), supported by a strong 54% FY21-23 EPS CAGR and an attractive FY22-23 dividend yield of 4.7- 5.7%. Following a strong close above multiple key SMAs, the stock is poised for an overhead resistance breakout at RM0.48 soon amid bottoming up technical oscillators. A successful breakout above this hurdle will spur greater upside toward RM0.515-0.575 territory. Cut lost at RM0.42.

Source: Hong Leong Investment Bank Research - 8 Oct 2021