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.
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.
The upcoming recession could be a great opportunity for bargain hunters. Analysts are bullish on Takaful and 6 other stocks as mentioned in the link below:
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....
newtrader1989
1,429 posts
Posted by newtrader1989 > 2022-03-23 12:52 | Report Abuse
Cannot go too far