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Monday, October 23, 2017

Takaful: Earnings Improved Marginally

Results Update

For QE30/9/2017, Takaful's net profit rose 8% q-o-q & y-o-y to RM48.6 million while revenue was mixed- dropped 2% q-o-q but rose 12% y-o-y to RM476 million. Revenue rose y-o-y due to to higher sales generated by both Family Takaful and General Takaful business. Profit before zakat and taxation rose y-o-y due to higher net Wakalah fee income arising from robust business growth in the General Takaful business. Family Takaful business generated higher gross earned contributions of RM948.0 million due to higher sales from Family Takaful mortgage related products. General Takaful business generated higher gross earned contributions of RM413.1 million due to growth in fire and motor classes.


Table: Takaful's last 8 quarters' results


Graph: Takaful's last 45 quarters' results

Valuation

Takaful (closed at RM3.83 last Friday) is now trading at a PE of 16.6 times (based on the last 4 quarters' EPS of 23.07 sen). At this PER, Takaful is deemed fully valued.

Technical Outlook

Takaful has recently tested its long-term uptrend line at RM3.60. The current price rebound could set the stage for its next upleg for the stock.


Chart: Takaful's weekly chart as at Oct 20, 2017 (Source: MalaysiaStock.biz)

Conclusion

Based on satisfactory financial performance & positive technical outlook, Takaful is a good stock for long-term investment despite its fully valuation.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.
 

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