For QE30/9/2019, Takaful's net profit rose 39% q-o-q or 34% y-o-y to RM112 million while revenue rose 12% q-o-q or 16% y-o-y to RM753 million. Revenue rose q-o-q mainly attributable to higher sales generated from Family and General Takaful business. Profit before zakat and taxation rose 25% q-o-q mainly attributable to higher net wakalah fee income.. Family Takaful business generated higher gross earned contributions of RM543.7 million, increased by 17%, as compared to RM464.6 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 RM171.9 million, increased by 3%, as compared to RM166.2 million in the immediate preceding quarter. The rise was mainly due to fire and commercial classes.
Table: Takaful's last 8 quarters' results
Graph: Takaful's last 54 quarters' results
Valuation
Takaful (at RM6.20 yesterday) is now trading at a PE of 13.5 times (based on the last 4 quarters' EPS of 46.07 sen). For a growth stock with 3-year CAGR of 30%, Takaful's PEG ratio is about 0.45 time. As such, Takaful is deemed attractive.
Technical Outlook
Takaful has consolidated for about 3 months after it peaked at RM7.18 in June. Its support level are at RM6.00 & RM5.75 while its resistance levels are at RM7.00 & RM7.15.
Chart: Takaful's weekly chart as at Oct 24, 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.
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