Decent all-round performance

1QFY24 was a good quarter for MNRB with profit growth across all its key business segments, aided largely by higher investment income during the period. Our forecasts are maintained for now, given the volatile nature of investment returns, though we are encouraged by the topline growth across the segments. We maintain a HOLD on MNRB with an unchanged Gordon Growth Model (GGM)-derived TP of MYR1.09 (COE: 9.4%, ROE: 5% LT growth: 3%).

Above expectations

MNRB’s 1QFY24 net profit of MYR69.5m was already 50% of our full-year forecast, buoyed by much stronger investment returns during the quarter, amid improved MTM investment gains as well as higher forex profits. Our forecasts are nevertheless maintained, in light of the volatility of investment returns.

Higher contributions from reinsurance/retakaful

The reinsurance business turned around with a net profit of MYR59.8m in 1QFY24 versus a net loss of MYR7.8m in 1QFY23 due to improved investment income and lower claims, especially in the absence of claims relating to the Great Malaysian Flood (end-2021). The retakaful business also fared better with a 164% YoY jump in net profit due to a better underwriting performance and also higher investment income.

Commendable growth in family and general takaful

The general takaful business saw its takaful revenue jump 43% YoY due to robust motor premiums and higher agency sales. Its net profit surged 52% YoY as a result of the higher revenue as well as better investment income and wakalah fees. The family takaful business saw a 14% YoY growth in revenue while net profit also improved due to higher investment income.

Source: Maybank Research - 1 Sep 2023