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Monday, February 29, 2016

Allianz: Earnings continued to rise

Result Update

For QE31/12/2015, Allianz's net profit increased by 10% q-o-q or 21% y-o-y to RM86 million while revenue increased by 3% q-o-q but declined 4% y-o-y to RM1.17 billion.

Revenue increased q-o-q due mainly to increase in gross earned premiums by RM28.3 million and higher investment income by RM6.8 million. PBT increased q-o-q  mainly to higher contribution from both insurance operations. PBT for general insurance operation rose by 16.1% or RM12.0 million to RM86.7 million due to one-off recognition of dis-allowance of GST input tax credit for certain motor claims since the implementation of GST on 1 April 2015. PBT for life insurance operation rose by 80.3% or RM17.9 million to RM40.2 million due to higher contribution from investment-linked business.


Table: Allianz's last 8 quarterly results

Allianz's net profit  for QE31/12/2015 has surpassed the previous high recorded in QE31/3/2014.


Chart 1: Allianz's last 40 quarterly results

Valuation

Allianz (closed RM9.93 last Friday) is now trading at a PE of 11 times (based on last 4 quarters' EPS of 90 sen). At this PE, Allianz is deemed fairly attractive.

Technical Outlook

Allianz is still in a long-term uptrend line with support at RM9.00. Its uptrend accelerated from mid-2012 to early 2014, culminated with a Triple Top reversal. This brought the stock down to just below the RM10.00 psychological level. Provided the share price stays above the RM9.00 mark, Allianz's long-term uptrend is intact.


Chart 2: Allianz's monthly chart as at Feb 26, 2016 (Source: ShareInvestor)

Conclusion

Based on satisfactory financial performance and fairly attractive valuation, Allianz remains a good stock for long-term investment.

Note: 
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Allianz.

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