Allianz: Earnings Growth Accelerated

Result Update

For QE30/6/2019, Allianz's net profit rose 19% q-o-q or 31% y-o-y to RM118 million while revenue rose 1.6% q-o-q or 4.5% y-o-y to RM1.366 billion. The Group’s operating revenue rose 1.6% q-o-q to RM1.37 billion due to a 1.8%-increase in general insurance segment’s operating revenue to RM582.1 million [due mainly to higher gross earned premiums in the current quarter] and a 1.5%-increase in  life insurance segment’s operating revenue to RM780.7 million [due mainly to higher investment income in the current quarter].

The Group’s profit before tax rose 17.5% to RM177.7 million due mainly to higher profit contribution from both insurance segments. The profit before tax of general insurance segment rose 6.6% to RM91.7 million, due mainly to better underwriting profit as a result of lower management expenses. Meanwhile, the profit before tax of life insurance segment rose 28.3% to RM88.4 million, due mainly to higher fair value gain arising from change in interest rate. The investment holding segment registered a loss before tax of RM2.5 million as compared to a loss before tax of RM3.3 million in the preceding quarter ended 31 March 2019 due to lower management expenses in the current quarter.


Table: Allianz's last 8 quarterly results


Graph: Allianz's last 54 quarterly results

Valuation

Allianz (closed RM13.80 yesterday) is now trading at a PE of 11.5 times (based on last 4 quarters' diluted EPS of 120 sen). At this PE, Allianz is deemed fairly attractive.

Technical Outlook

Allianz is in a long-term uptrend line, with support at RM11.80. Its immediate resistance is at the horizontal line at RM14.80.


Chart 1: Allianz's weekly chart as at Aug 23, 2019_10.30am (Source: Malaysiastock.biz)


Chart 2: Allianz's daily chart as at Aug 23, 2019_10.30am (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory financial performance, fairly attractive valuation and positive technical outlook, Allianz remains a 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.