I agree QR is a good, price is low and good opportunity to buy. I just wonder if there is any underlying problems somewhere that is about to surface. GE15 is coming and this counter should perform too but it seems that it is going south now. It seems that this price is really undervalued now.
2021-11-15 17:49 33% Cukai Makmur one off, no problem.
FRS17 reduces the book value by 28.5%. To me, that's a serious issue. It instantly raises P/B ratio, which is the primary valuation for insurance companies. Also, PAT and dividend will be reduced by 16%. This is also an issue.
Change in CEO might also be an issue (although there's a possibility that the next CEO will do an even greater job).
I had seen how CIMB (the market cap more than 10x of Takaful) was pressed to RM3, hence I know that pressing down Takaful is a piece of cake. Already mentioned dont fight the trend... This is a trend bolstered with the FRS17 impact in 2023, not a downward trend with no fundamental reason...
2021-10-13 13:09 LOL, give it up, even if it rebounds, will be extremely difficult to break above the extremely strong RM4.2 support-turned resistance. Just let it go down and buyback at the next support
2021-11-14 14:57 Beware of the possible dead cat rebound next week, there were a lot FB lives last Friday. They could be trapped at penthouse, waiting to dispose.
If you really want to buy, you can try your luck at 3.2, not when it is floating in the middle of resistance and support. Again, if they really want to press it down, press to the next support of RM2.1 is NOT IMPOSSIBLE. So please dont flame me if you try at RM3.2, but it falls to RM2.1 later.
insurance is a growth company, revenue and income will only grow year to year..and their risk is always mitigated by bigger reinsurance company upstreams
I agree QR is a good, price is low and good opportunity to buy. I just wonder if there is any underlying problems somewhere that is about to surface. GE15 is coming and this counter should perform too but it seems that it is going south now. It seems that this price is really undervalued now." =======================
This is another brainchild of the Alibaba and the forty or more thieves. Another Guaranteed Losing Company (GLC). These are piggy banks of the politicians. Everything masked under a business entity.
Fear of this FRS17 implementation is over reacted by the market.. if PAT is only reduced by 16%, then for the EPS of 2021, which is about 49.4 sen, will be 41.5 sen after taking into account of this 16% reduction.. & PE at the current price will then only be 8.2.. so much undervalue for an insurance company with good profit growth..
but anyway, I like the over reaction.. this will make the stock a lot cheaper
A few points mentioned in recent Affin and AM Bank reports on MFRS 17 implementation 1. Adoption in 1 Jan 2023. Management to give high level disclosure in middle of this year 2. Expected 2023 net profit to dip 15% to 20% 3. Management guided it will take 6 years for profit to normalize to pre-MFRS 17 (I don't understand this point. If profit drops by 20% and it takes 6 years to recover, does it mean profit only grow at 3% p.a.? It seems too pessimistic. Maybe I've misunderstood.) 4. Present value of future profits, known as CSM (Contractual Service Margin), will be carved out from retained earnings on Day-1 adoption. CSM is expected to be 30%-40% (Affin report)/ 30%-45% (AM report) of retained earnings 5. According to Am Bank forecast, book value per share will grow to RM2.5 in FY22, but drop to RM1.7 in FY23. 6. My own take is since book value is expected to drop more than net profit, ROE should be higher, and therefore a higher price to book ratio should be applied. But I'm not sure about the relative magnitudes. 7. The analysts also highlight that change to MFRS17 is an accounting re-representation. There is no underlying business change. 8. Management believes they can sustain the dividend payment of 12 sen per year despite lower profit.
MFRS (15+2.0) really made existing shareholders dizzy. I really hope there is an accountant here. Anyone who understands accounting, please help, and don't hesitate to share here. Management revealed that implementing the new accounting next year will affect 15% to 20% of the company's earnings. This means that without accounting for this MFRS (15+2.0), 15%~20% of the company's earnings would not "disappear" or "earn less". A more controversial question is why the management said that it would take 6 years to "get back" the 15-20% of the "less earned"? My understanding is that this may be the management's assumption that it will take about 6 years. Each policy is different, and the duration of the premium is also different, it may be 5 years, 10 years, 15 years. How can the new accountant have only 6 years since it already needs to be separated and accounted for? .Assuming that it really only takes 6 years for this new accounting to be recorded, I believe that everyone has seen a potential growth space, that is, the company's profit will grow by 3.33% every year. In other words, the 20% lost in 2023 and then every future year 2024, 2025 will naturally increase by 3.33% until 6 years. .
b) This 100mil cannot be directly recorded and the management expects that this 100mil must be deducted by 20% of the profit, that is 100mil x 20% = 20mil must be separated & recorded in an average of 6 years. That is to add back 3.333mil per year until FY2029.
c) (This is the most critical assumption that is related to the final conclusion) ~ TAKAFUL will make the same amount of revenue every year in the future, without growing it and consistently earn 100mil every year. If there is a little more demand or sales, then the management will not want it. Yes, everyone please don't ask why, they just don't want the company to grow, and the premiums are guaranteed not to be expensive, even in the age of high inflation.
d) FY2023, the original profit of 100mil is 100mil - 20% = 80mil after the implementation of MFRS(15+2.0) FY2023=80mil FY2024=83.333mil FY2025=86.666mil FY2026=90mil FY2027=93.333mil FY2028=96.666mil FY2029=100mil
Conclusion: Even the most incompetent management will say "Look, implement this new accounting standard of what (15+2.0) or (19-2.0), the 20% we lose in the first year is inevitable, But please look at the next years, we are also capable of making the company from FY2023 to FY2029 to increase the annual profit growth of 4.166%, 4.0%, 3.846%, 3.7%, 3.57%, 3.44%, so we require Increase the management salary, we hope the general meeting of shareholders can pass.
syarikat takaful malaysia (STM) used to be the market leader in family takaful market in malaysia since many years ago as mentioned in the yearly AR. but now it position is lost and become 2nd largest.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....