TAKAFUL: A Sudden Selldown!

Takaful opened at RM5.50 and dropped to a low of RM5.20 in just 13 minutes. A check on Bursa website and on the internet failed to reveal any new development that might explain the sudden selldown.

In my opinion, this selldown may be due to the upcoming corporate exercise proposed by BIMB, which includes inter alia a distribution of Takaful shares and Bank Islam shares held by BIMB to its shareholders. Unlike the shareholders of BIMB who may be looking forward to receiving Bank Islam and Takaful shares, the shareholders of Takaful can only look forward to having more small shareholders joining their rank. These small shareholders may simply sell off their free Takaful shares received, which may depress the share price going forward. 

Having said that, it should be noted that Takaful's fundamentals are pretty good. See my recent post on its financial performance (here). However its technical outlook has turned negative with 50-day SMA line crossing under the 200-day SMA line (generally referred to as the death cross) and the current low going lower than the previous 2 lows, which together with the lower highs, would fulfill the requirement of a downtrend.

Chart 1: Takaful's daily chart as at Jan 16, 2020-11.20am (Source: Malaysiastock.biz) 

A similar technical set-up was observed in AEONCR in September last year when the lows and the highs were getting lower and the death cross took place. Despite the negative set-up in AEONCR had a big rally in October, which would have been an excellent selling opportunity. After that, the downtrend continued. What caused the change of investors' outlook for AEONCR? It's probably due to poorer financial performance which was highlighted in my recent post on its financial performance (here).

Chart 2; AEONCR's daily chart as at Jan 16, 2020-11.20am (Source: Malaysiastock.biz)

Based on the bearish technical outlook for Takaful, you may want to avoid buying into this good stock in the near term. 

TAKAFUL: Earnings Continued to Rise

Results Update

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.

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.

Takaful: Earnings Growth Continued

Results Update

For QE310/9/2018, Takaful's net profit rose 67% q-o-q or 73% y-o-y to RM84 million while revenue rose 20% q-o-q or 36% y-o-y to RM649 million. Revenue rose q-o-q due to higher sales generated from Family Takaful and General Takaful business.

Family Takaful business generated higher gross earned contributions of RM436.7 million, increased by 25%, as compared to RM350.2 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 RM177.1 million, increased by 10%, as compared to RM160.3 million in the immediate preceding quarter. The increase was mainly attributable to fire and motor classes.

Profit before zakat and taxation rose q-o-q mainly attributable to higher net wakalah fee income. To understand the fee structure, check out this link.


Table: Takaful's last 8 quarters' results


Graph: Takaful's last 50 quarters' results

Valuation

Takaful (at RM3.86 as at 11.30am) is now trading at a PE of 12.2 times (based on the last 4 quarters' EPS of 31.65 sen). For a growth stock with 3-year CAGR of 21%, Takaful's PEG ratio is about 0.6 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.


Chart: Takaful's monthly chart as at Apr 25, 2018_10.00am (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory financial performance and attractive valuation, Takaful 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.

Takaful: Strong Earnings Continued

Results Update

For QE31/3/2018, Takaful's net profit rose 24% q-o-q or 23y-o-y to RM70 million while revenue was mixed- rose 44% q-o-q or 13% y-o-y to RM746 million. Revenue rose y-o-y due to to higher revenue generated by both Family Takaful and General Takaful business. Profit before zakat and taxation rose y-o-y due to higher net Wakalah fee income. Family Takaful business generated higher gross earned contributions of RM324.0 million due higher sales from mortgage and credit-related products. General Takaful business generated higher gross earned contributions of RM182.4 million mainly from fire and motor classes.


Table: Takaful's last 8 quarters' results


Graph: Takaful's last 47 quarters' results

Valuation

Takaful (at RM3.39 as at 3.30pm) is now trading at a PE of 12.7 times (based on the last 4 quarters' EPS of 26.7 sen). At this PER, Takaful is deemed very attractive.

Technical Outlook

Takaful has broken below its long-term uptrend line, SS at RM3.80.


Chart 1: Takaful's monthly chart as at Apr 25, 2018_10.00am (Source: Shareinvestor.com)

Takaful is now moving in an intermediate downtrend line, RR with resistance at RM3.50. If it can break above the RM3.50, it may begin its next upleg.


Chart 2: Takaful's weekly chart as at Oct 20, 2017 (Source: Shareinvestor.com)

Conclusion

Based on satisfactory financial performance & attarcive valuation, Takaful is a good stock for long-term investment. However we will have to wait for the technical outlook to turn positive before taking any aggressive position on this stock.

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

Takaful: Earnings Improved Marginally

Results Update

For QE30/9/2017, Takaful's net profit rose 8% q-o-q & y-o-y to RM48.6 million while revenue was mixed- dropped 2% q-o-q but rose 12% y-o-y to RM476 million. Revenue rose y-o-y due to to higher sales generated by both Family Takaful and General Takaful business. Profit before zakat and taxation rose y-o-y due to higher net Wakalah fee income arising from robust business growth in the General Takaful business. Family Takaful business generated higher gross earned contributions of RM948.0 million due to higher sales from Family Takaful mortgage related products. General Takaful business generated higher gross earned contributions of RM413.1 million due to growth in fire and motor classes.


Table: Takaful's last 8 quarters' results


Graph: Takaful's last 45 quarters' results

Valuation

Takaful (closed at RM3.83 last Friday) is now trading at a PE of 16.6 times (based on the last 4 quarters' EPS of 23.07 sen). At this PER, Takaful is deemed fully valued.

Technical Outlook

Takaful has recently tested its long-term uptrend line at RM3.60. The current price rebound could set the stage for its next upleg for the stock.


Chart: Takaful's weekly chart as at Oct 20, 2017 (Source: MalaysiaStock.biz)

Conclusion

Based on satisfactory financial performance & positive technical outlook, Takaful is a good stock for long-term investment despite its fully valuation.

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. 

Takaful: Earnings Soared

Results Update

For QE31/3/2017, Takaful's net profit rose 45% q-o-q or 22% y-o-y to RM57 million while revenue rose 34% q-o-q or 4% y-o-y to RM660 million. Profit before zakat and taxation rose 77.6% q-o-q mainly due to higher net wakalah fee income.


Table: Takaful's last 8 quarters' results

Takaful's net profit is now at a new high!


Graph: Takaful's last 44 quarters' results

Valuation

Takaful (closed at RM4.01 yesterday) is now trading at a PE of 17.7 times (based on the last 4 quarters' EPS of 22.71 sen). At this PER, Takaful is deemed fully valued.

Technical Outlook

Takaful is resting on a long-term uptrend line at RM4.00.


Chart: Takaful's weekly chart as at April 25, 2017 (Source: MalaysiaStock.biz)

Conclusion

Based on satisfactory financial performance & positive technical outlook, Takaful is a good stock for long-term investment despite its fully valuation.

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. 

Takaful: Earnings Dipped Sequentially

Results Update

For QE30/6/2016, Takaful's net profit dropped by 2% q-o-q to RM46 million on the back of a 27%-drop in revenue to RM462 million. Comapred to same quarter last year, revenue increased by 7%  while net profit rose by 17%. Revenue increased y-o-y mainly attributable to higher sales generated by Family & General Takaful business. Family Takaful business rose from RM287.3 million to RM310.9 million, due to higher sales of Family Takaful Group Medical & Family Takaful mortgage-related products. General Takaful revenue rose marginally from RM112.6 million to RM119.4 million due to higher business from Fire and commercial classes. Its profit before zakat and taxation rose y-o-y mainly due to higher wakalah fee income.


Table: Takaful's last 8 quarters' results

From the Chart 1 below, we can see that the revenue is on the uptrend. Earnings continues to rise gradually while profit margins have stagnated of late.


Chart 1: Takaful's last 41 quarters' results

Valuation

Takaful (closed at RM4.00 yesterday) is now trading at a PE of 20 times (based on the last 4 quarters' EPS of 19.93 sen). At this PER, Takaful is deemed fully valued.

Technical Outlook

The stock has been in an uptrend in the past 5 years. The stock is showing a bit of weakness, with the MACD crossing below the MACD signal line. In addition, the Bollinger Bands are beginning to constrict. These mean that the share price may dip below the RM4.00. If that were to happen, one can only hope that the Bollinger middle band will once again provide support for the stock (at RM3.50) - like it did in late 2014.


Chart 2: Takaful's monthly chart as at Jul 27, 2016 (Source: ShareInvestor)



Chart 3: Takaful's weekly chart as at Jul 27, 2016 (Source: ShareInvestor)

Conclusion

Despite high valuation & cloudy technical outlook, BIMB is still rated a HOLD based on its steady financial performance & its strong position in the takaful insurance business.

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.

Takaful: Earnings Inched Up

Results Update

For QE31/3/2016, Takaful's net profit increased by 28% q-o-q to RM47 million while revenue rose 57% q-o-q to RM633 million. Revenue increased by 12.6% y-o-y mainly attributable to higher sales generated by Family & General Takaful business. Family Takaful rose from RM237 million to RM289 million from higher sales of Family Takaful mortgage-related products. General Takaful revenue rose marginally due to higher business from commercial classes. Its profit after before zakat and taxation was hardly changed due to lower tax expenses which offset decline in surplus transfer from Family Takaful business (due to lower realized gain from disposal of investment) & from General Takaful business (due to lower net investment income).


Table: Takaful's last 8 quarters' results

From the Chart 1 below, we can see that the revenue is on the uptrend. Profit margin rose steadily over the past 4 quarters which helped to stabilized the profit numbers.


Chart 1: Takaful's last 39 quarters' results

Valuation

Takaful closed at RM4.07 yesterday. This means that Takaful is now trading at a PE of 21 times (based on the last 4 quarters' EPS of 19.2 sen). At this PE multiple, Takaful is deemed fully valued.

Technical Outlook

The stock has been in an uptrend in the past 4 years. However its movement has been sideways for the past 9 months after the share split of 1-to-5. The breakout in in March failed and the share price is again within the range of RM3.70-4.20.


Chart 2: Takaful's monthly chart as at Apr 18, 2016 (Source: ShareInvestor)


Chart 3: Takaful's weekly chart as at Apr 18, 2016 (Source: ShareInvestor)

 Conclusion

Despite high valuation & unexciting technical outlook, I would rate Takaful a HOLD due to its steady earnings growth.

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.

Takaful: Earnings improved on higher fee income

Results Update

For QE31/12/2015, Takaful's net profit increased by 6% q-o-q or 22% y-o-y to RM36 million while revenue rose marginally by 4% q-o-q or 0.5% y-o-y to RM403 million. Revenue increased marginally y-o-y mainly attributable to higher sales generated by Family Takaful business. Its profit before zakat and taxation increased y-o-y mainly attributable to higher wakalah fee income.


Table: Takaful's last 8 quarters' results

From the Chart 1 below, we can see that the revenue is on the uptrend. Profit margin rose steadily over the past 4 quarters. The increased profit margin helped to stabilized the profit numbers despite lower revenue over the past 3 quarters.


Chart 1: Takaful's last 39 quarters' results

Valuation

Takaful closed at RM3.76 yesterday. This means that Takaful is now trading at a PE of 19.6 times (based on the last 4 quarters' EPS of 19.2 sen). At this PE multiple, Takaful is deemed fully valued.

Technical Outlook

The stock has been in an uptrend in the past 4 years. However its movement was sideways for the past 6-7 months after the share split of 1-to-5. Considering 500%-increase in the outstanding shares, Takaful's share price movement has been fairly encouraging.


Chart 2: Takaful's monthly chart as at Jan 27, 2016 (Source: ShareInvestor)

Conclusion

Based on satisfactory financial performance & positive technical outlook, Takaful is still a good stock for long-term investment. However, its upside potential is limited as the stock is fully-valued.

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.