For Qe30/6/2012, Allianz's net profit increased 8% q-o-q or 39% y-o-y to RM57.4 million while revenue increased by 4% q-o-q or 14% y-o-y to RM772 million. The improved bottom-line on q-o-q basis was due to higher surplus from life insurance operations, offset by lower profit before tax from the general insurance operations.
Table: Allianz's last 8 quarterly results
Chart 1: Allianz's last 26 quarterly results
Valuation
Allianz (closed at RM6.37 on Friday) is now trading at a PE of 11.5 times (based on last 4 quarters' diluted EPS of 55.5 sen#). Allianz is trading at the same PE multiple as Manulife (closed at RM3.18 on Friday and has an annualized EPS of 26.6 sen).
(#Note: The EPS stated in the above table is the gross EPS. Allianz has issued equal number of Allianz-PA (which stands for ICPS or Irredeemible Convertible Preference shares) and to arrive at the diluted EPS, you need to divide the stated EPS by 2.)
Technical Outlook
In one single swoop, Allianz rebounded from the strong horizontal support of RM4.50 & broke above the strong horizontal resistance at RM5.50 and then nearly reach the potential target of the current rally of RM6.50. All these happened in a matter of past 3 months.
Chart 2: Allianz's weekly chart as at Aug 17, 2012 (Source: Tradesignum)
Conclusion
Based on good financial performance & reasonable valuation, Allianz remained a good stock for long-term investment. However, after a strong rally over the past 3 months, the stock is likely to consolidate at the present level for a while. Rating is thus downgraded to HOLD.
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