KEY INVESTMENT HIGHLIGHTS

• 9MFY24's Core NP of RM303m was Above/Above our/street forecasts: 88%/85% of full-year forecasts
• Core themes: (a) GWP growth still steady, (b) Improved combined ratio, (c) Investment income normalisation
• Forecasts unchanged
• Maintain BUY | Unchanged TP of RM14.52 | based on an unchanged FY25F P/BV of 2.42x

Results in a nutshell:

▲ 9MFY24's Core net profit (NP) of RM303m up by 29%yoy.

▲ 3QFY24's Core NP of RM124m up by 59%qoq.

▲ 9MFY24's GWP of RM1,429m grew by a solid 7%yoy while 3QFY24's figure of RM465m grew by a solid 8%qoq.

▼ 9MFY24's Combined ratio of 71.2% up +0.1%yoy.

▲ 3QFY24's Combined ratio of 66.8% down -6.8%qoq.

Have a look at:

Strong earnings growth. PAT for 9MFY24 went by +29%yoy despite small revenue growth. Earnings growth was supported by higher profit from general insurance segment, which increased by +27.4%yoy to RM339.9m. Lower reinsurance expenses also played a role.

Stable revenue. Revenue 9MFY24 increased by +1.0%yoy to RM1,439.0m. Of this, RM1,394.8m was generated from general insurance segment and RM44.2m from investment holding segment. The revenue growth was mainly driven by the investment holding segment, which grew +43.0%yoy, due to higher dividend income.

Forecasts unchanged. We make no changes to the earnings forecast.

Key downside risks. (1) Weak investment result, (2) Ramp up in claims, (3) Weaker GWP growth.

Maintain BUY call: Unchanged GGM-TP of RM 14.52. The TP is based on an unchanged FY25F P/BV of 2.42x.

(GGM assumptions: FY25F ROE of 15.4%, LTG of 4.0% & COE of 8.7%)

Source: MIDF Research - 30 Oct 2024