Takaful- still going strong

Results Update

For QE31/12/2013, Takaful's net profit rose 31% q-o-q & 28% y-o-y to RM41.5 million while revenue was unchanged when compared to immediate preceding quarter (QE30/9/2013) but rose sharply by 20% y-o-y to RM378.5 million. Revenue increased due to higher sales generated by both Family and General Takaful business. Gross earned contribution from Family Takaful increased from RM198.3 million to RM246.1 million while for General Takaful business, it dropped from RM125.1 million to RM101.9 million. The surplus transfer in the quarter under review from Family Takaful was RM29.7 million as compared to RM28.3 million in the same period last year. General Takaful was RM17.0 million as compared to RM15.9 million previously. The higher surplus transfer from Family and General Takaful is mainly due to better underwriting and investment results.


Table: Takaful's last 8 quarters' results


Chart 1: Takaful's last 31 quarters' results

Valuation

Takaful (closed at RM10.68 at end of morning session) is now trading at a PE of 12.5 times (based on the last 4 quarters' EPS of 85.37 sen). At this PE multiple, Takaful is deemed very attractive, given its high CAGR of more than 30%.

Technical Outlook

The stock has been in an uptrend since its breakout at RM1.70 in 2011 (here).


Chart 2: Takaful's weekly chart as at Feb 17, 2014 (Source: Tradesignum)

Conclusion

Based on the good financial performance, strong growth and attractive valuation, Takaful could be a 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, Takaful.