Takaful: Quarterly PBT Exceeded RM100 Million!

Results Update

For QE31/12/2018, Takaful's net profit rose 8% q-o-q or 61% y-o-y to RM91 million while revenue rose 8% q-o-q or 35% y-o-y to RM702 million. Revenue rose q-o-q due to higher sales generated from Family Takaful business. Profit before zakat and taxation rose q-o-q mainly attributable to higher net wakalah fee income. Family Takaful business generated higher gross earned contributions of RM497.6 million, increased by 14%, as compared to RM436.7 million in the immediate preceding quarter. The increase was mainly attributable to higher sales from credit related products.General Takaful business generated gross earned contributions of RM166.0 million, decreased by 6%, as compared to RM177.1 million in the immediate preceding quarter. Thedrop was mainly due to lower revenue from motor classes.


Table: Takaful's last 8 quarters' results

You should note that Takaful's quarterly PBT broke above the RM100 million level for the first time.


Graph: Takaful's last 51 quarters' results

Valuation

Takaful (at RM4.10 last Friday) is now trading at a PE of 11.5times (based on the last 4 quarters' EPS of 35.8 sen). For a growth stock with 3-year CAGR of 23%, Takaful's PEG ratio is about 0.5 time. As such, Takaful is deemed attractive.

Technical Outlook

Takaful has been range-bound for the past 3 years, with support at RM3.25 and resistance at RM4.00. Last friday, Takaful finally broke out of the trading range.


Chart: Takaful's weekly chart as at Jan 25, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory financial performance, attractive valuation and bullish technical outlook, Takaful is a very good stock for long-term investment.

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.