Allianz- a new chapter begins

Results Update

Allianz has just announced its results for FYE31/12/2009. For QE31/12/2009, Allianz's net profit increased by 160% q-o-q or 194% y-o-y to RM60.2 million. It revenue dropped 17% q-o-q but was 7% higher than the previous corresponding quarter.

Allianz attributed its increased net profit to increase in underwriting profit from the general insurance as well as the transfer of surplus of RM12 million from the Life Funds to the Shareholders' Funds. The latter is worth noting because this is the first quarter where Allianz has recognized contribution from its life insurance business. Prior to this, it has been beefing up the Life Insurance' solvency margin to meet Bank Negara's requirement (without recognizing any contribution in its bottom-line).


Table 1: Allianz's 8 quarterly results


Chart 1: Allianz's 16 quarterly results

Valuation

Allianz (closed at RM4.95 at the end of the morning session) is now trading at a PER of 6.4 times (based on last 4 quarters' EPS of 77 sen). At this multiple, Allianz is deemed very attractive.

Technical Outlook

Allianz has broken above its medium-term downtrend at RM4.70-75.


Chart 2: Allianz's weekly chart as at Mar 1, 2010)_12.30pm (Source: Quickcharts)

Conclusion

Based on good financial performance, attractive valuation & bullish technical outlook, Allianz is a good trading BUY as well as a good stock for long-term investment.