LPI- bottom-line jumped

Result Update

For QE31/3/2013, LPI's net profit increased by 11% q-o-q or 15% y-o-y to RM47 million while revenue increased by 9% q-o-q or 7% y-o-y to RM282 million. The overall improvement q-o-q was mainly "contributed by the general insurance segment which registered an impressive growth in underwriting profit of RM27.8 million to RM53.3 million as compared to the preceding quarter ended 31 March 2013. The growth in underwriting profit was mainly due to higher net earned premium and lower net claims incurred for the current quarter under review."


Table 2: LPIs last 8 quarterly results


Chart 1: LPI's last 30 quarterly results

Valuation

LPI (closed at RM15.64 yesterday) is now trading at a PE of 18.8 times (based on last 4 quarters' EPS of 83.4 sen). LPI's earning, which has moderated to single digit for the past two years, picked up again in the last 4 quarters. LPI's PEG ratio is about 1.2 times (based on average CAGR of 15% over the past 5 years). At this ratio, LPI is deemed fully-valued.

Technical Outlook

LPI is in an uptrend an dit appears to have broken above the line connecting its recent high. Will this breakout lead to an acceleration in the gradual uptrend? we will have to wait & see.


Chart 2: LPI's weekly chart as at July 9, 2013_10.30am (Source: Quickcharts)
 
Conclusion

Based of good financial performance and positive technical outlook, LPI is rated a HOLD. However, its upside is deemed limited unless the uptrend accelerates.




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, LPI.