STOCK FOCUS OF THE DAY
Tune Protect: Stronger topline growth amid improved general insurance underwriting profit BUY
We are upgrading our call on Tune Protect Group (TPG) from HOLD to BUY with a higher fair FV of RM1.10/share (previously RM1.00/share) after rolling forward our valuation to FY19, pegging the stock to an unchanged forward PB of 1.4x. The stock is now trading at an undemanding valuation of 0.9x to our FY19 BV/share estimate considering that it is still generating positive earnings with a decent ROE.
We see value emerging for the stock. Although the group’s earnings are still lower compared the quarters before the impact of Mavcom’s policy, we are seeing a recovery in the travel insurance business while the underwriting performance for its general insurance business has improved in 1QFY18. We make no changes to our estimates for now as this is only the first quarter’s results.
TPG reported a stronger core earnings (PATAMI) of RM17.0mil in 1QFY18 (+38.8%YoY). This was contributed by a higher topline growth from the recovery of the group’s travel insurance business as well as a growth in motor premiums.
Others :
MBM Resources: Partnering up for more OMI volume BUY
Pecca Group: Forging ahead BUY
Power Root: Poised for full recovery BUY
Tenaga Nasional: Fine start to the year BUY
V.S. Industry: Buy on weakness BUY
Ann Joo Resources: 1QFY18 net profit declines 17% YoY HOLD
MISC: 4 more Petrobras tankers presage bigger goals ahead HOLD
Sime Darby: YoY improvement across the board HOLD
Velesto Energy: Short-term charters cloud earnings visibility HOLD
QUICK TAKE
Plantation Sector: News flow for week 21 – 25 May NEUTRAL
RETAIL RESEARCH
Stocks On Radar: SKP Resources, CCK Consolidated, Bumi Armada, Top Glove
NEWS HIGHLIGHTS
LSK: Plans to double sales by 2020
Ta Ann: Expands plantation log harvest for plywood
IHH Healthcare: Q1 net profit falls 87% on forex losses, finance costs
DISCLAIMER:
The information and opinions in this report are prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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