Showing posts with label LPI. Show all posts
Showing posts with label LPI. Show all posts
April 9, 2015
March 20, 2015
April 10, 2012
LPI ' High Claims Ratio Impacted Underwriting Surplus
Stock Name: LPI
Company Name: LPI CAPITAL BHD
Source: RHB Research - 10 April 2012
Company Name: LPI CAPITAL BHD
| Research House: RHB | Price Call: SELL | Target Price: 12.15 |
LPI ' High Claims Ratio Impacted Underwriting Surplus
Underperform (Downgraded)
Results Note
'' 1QFY12/12 net profit (-18.5% yoy) was below expectations, accounting for only 17-18% of our and consensus full-year forecasts due mainly to higher-than-expected claims ratio of 60.1%.
'' Our fair value is lowered to RM12.15 (from RM13.60) based on unchanged target PER of 16x FY12 EPS. Downgrade to Underperform (from market perform).
Source: RHB Research - 10 April 2012
March 6, 2012
LPI (FV RM15.40 - BUY) Company Update: Solid as a Rock
Stock Name: LPI
Company Name: LPI CAPITAL BHD
Company Name: LPI CAPITAL BHD
| Research House: CIMB | Price Call: BUY | Target Price: 15.40 |
We met up with LPI's management recently and came away fromthe meeting confident that the groupwill sustain its earnings momentum moving forward, driven by: (i) higherunderwriting surplus mainly from its non-motor segments, (ii) lower claimsratio, and (iii) stronger agency force. Maintain BUY, with an unchanged FV ofRM15.40, pegged to a 3-year PER of 19.4x.
Solid record. LPI's FY11 results stood strong in spite ofthe challenging and competitive business environment. Management is targetingto grow its gross premiums by some 15%, boosted by: (i) new businesses from strategic partners which are also globalinsurers, (ii) strong growth from its construction-related business, supportedby the rollout of more Economic Transformation Programme (ETP) projects, and(iii) stronger growth in its marine, aviation and transit business, which isgenerally profitable. We understand that management intends to strengthen itsagency force as it believes that it may be able to attract agents from otherinsurance companies given the prevailing uncertainties arising from M&As inthe industry.
MMIP likely to stillsee shortfall in FY12. The overall claims ratio in FY11 shot up to 48.9%from 47.7% y-o-y due to its share of losses incurred in relation to theMalaysian Motor Insurance Pool (MMIP). LPI's share of MMIP losses in FY11amounted to RM11.1m as MMIP had chalkedup a cumulative shortfall over 7 quarters as at end-3Q11. We expect MMIP tocontinue to fall short of funds over the next two years, at an estimatedRM2m'RM3m per quarter. Nonetheless, management is confident of keeping itsclaims ratio below 50% in tandem with its stringent underwriting practices.
Sustainable dividendpayout expected. Generally seen as adividend stock, management has guided that LPI would be able to maintain a100% dividend payout ratio given its high capital adequacy ratio (CAR) that is well above the required 130% set byBank Negara Malaysia. We are confident that this is possible in light of itsstable cash flow outlook and net cash position.
Maintain BUY. Wecontinue to like the group's record in creating shareholder value by consistently delivering robust results and growth. That said, given its relatively high share price, we do not discount thepossibility of the company declaring another bonus issue or share split toreward its shareholders as well as to enhance the stock's liquidity. MaintainBUY, with an unchanged FV of RM15.40, based on its 3-year PER band of 19.4x.
Source: OSK188
January 10, 2012
RHBInvest Research Highlights 10th January 2012
Stock Name: HEKTAR
Company Name: HEKTAR REITS
Stock Name: LPI
Company Name: LPI CAPITAL BHD
Company Name: HEKTAR REITS
| Research House: RHB | Price Call: BUY | Target Price: 1.61 |
Stock Name: LPI
Company Name: LPI CAPITAL BHD
| Research House: RHB | Price Call: SELL | Target Price: 11.60 |
10th January 2012
| Top Story |
| Hektar REIT ' Strong commitment to maintain 10.3 sen DPU Outperform Company Update - Hektar REIT's management has guided us on the asset enhancement initiatives in the pipeline for the two Kedah malls that it is proposing to acquire. Plans include: 1) physical asset enhancements; and 2) tenant remixing exercise. - The REIT is committed to maintain at least 10.3 sen DPU, even after the proposed rights issue exercise to fund the acquisition. - Overall, our FY12-13 EPU estimates decreased by 5.7-8.6%, after factoring in the earnings contribution from the two Kedah malls and the higher unit base from the proposed rights issue. - We revise fair value to RM1.61 (from RM1.64), based on a target yield of 6.5% after we reduce our FY12 DPU estimate slightly to 10.5 sen (from 10.7 sen). Maintain Outperform. - Related story: Hektar REIT News Update ' Acquiring Assets in Kedah (9 Dec 2011); Hektar REIT Briefing Note - Attractive Yield That Has Yet To Be Discovered 10 Nov 2011) |
| |
| Corporate Highlights |
| LPI ' FY11 earnings in line, claims ratio inched up Underperform Results Note - FY11 net profit of RM154.5m (+12% yoy) was in line with our and consensus expectations. - FY11 earnings growth was driven by the 20.1% yoy growth in gross premiums, slightly higher than our assumption of an 18% growth. FY11 claims ratio of 48.9% was higher vs. FY10 of 47.7%, although slightly lower than our projections of 49.5%. - Our FY12-13 earnings forecasts trimmed slightly by 0.1-1.7% after: 1) imputing FY11 gross premium numbers, thus resulting in lower FY12 gross premiums; and 2) slight adjustments in our key expenses assumptions. We also introduce our FY14 earnings forecast. - Reiterate Underperform with an unchanged fair value of RM11.60. |
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| Regional Equities |
| Indonesia Banks ' Still cautious on valuations Neutral Sector Update - Bank Indonesia (BI) data for Oct indicates that the banking system remains on an even keel. Oct loan growth stayed on an upward trajectory, rising 25.75% yoy from 25.23% and 23.89% in Sep and Aug respectively. We are looking for system loan growth to moderate to 20% in 2012. - Asset quality remained stable with few stress signals. - We see some upside for NIMs for the banks under our coverage in the next few quarters following the recent 75bp reduction in the benchmark interest rate as a result of lower funding costs and slower re-pricing of loan assets and gradually rising LDR. - Our contrarian Neutral (maintained) sector call stems from high absolute valuations. Premium valuations (superior ROEs notwithstanding) leave Indonesian banking stocks susceptible to a de-rating of sector multiples and portfolio flow reversals. Nonetheless, we are positive on the long-term intrinsic prospects for the Indonesian banking sector. - We reiterate our Market Perform calls on Rakyat, Mandiri and Danamon while BCA is an Underperform on valuation grounds. - Related story: Indonesia Banks Sector Update ' Double Happiness (21 Dec 2011) |
| |
| Macro |
| Foreign Reserves ' Retreated To US$133.6bn As At 31 December Economic Highlights (published 10 Jan 2012) - Forex reserves retreated by US$1.4bn or RM6.4bn in 2H Dec 2011 to US$133.6bn (RM423.4bn) as at 31 Dec, after bouncing back to grow by US$0.2bn or RM0.7bn in the 1H of Dec. - This was due to quarterly adjustment of forex revaluation loss, payment of import bills and some outflow of foreign portfolio funds, which were mitigated by the repatriation of export proceeds. - In view of the outflow of foreign portfolio funds, we believe the ringgit will likely remain weak in the near term. We expect the ringgit to be supported fundamentally at around RM3.00/US$ once the outflow of foreign portfolio investment normalises. - Meanwhile, the amount of excess liquidity (including repos) mopped up by the Central Bank accelerated to an estimate of RM287.4bn as at end-Dec, from RM278.4bn in mid-Dec and compared with RM242.3bn at end-2010. |
October 7, 2011
OSK upgrades LPI Cap from 'buy' to ' neutral'
Stock Name: LPI
Company Name: LPI CAPITAL BHD
OSK Research Sdn Bhd has upgraded LPI Capital Bhd to a 'buy' from 'neutral' with an unchanged fair value of RM13.60.
In a research note today, OSK said LPI Capital was expected to continue to create long-term shareholder value through unremitting growth and robust results given the group's resilient performance and strong fundamentals.
OSK said LPI Capital's net profit for the nine months of financial year 2011 jumped 14.1 per cent year-on-year (yoy), thanks to better underwriting surplus, which expanded on 21.2 per cent yoy surge in gross premium as well as healthier investment income (+29 per cent).
"The higher underwriting numbers also fuelled a 12 per cent yoy growth in pre-tax profit," it said.
OSK said LPI Capital's underwriting surplus expanded by 18.3 per cent yoy, propped up by more robust growth in gross premium.
"The growth was mainly attributed to the cargo, hull aviation and offshore segment, fire, and followed by the motor segment," it said.
It said with stringent risk selection and management surplus in place, LPI Capital has managed to tame its claims ratio to 48.1 per cent from 48.4 per cent in the same period last year. -- BERNAMA
Company Name: LPI CAPITAL BHD
| Research House: OSK | Price Call: BUY | Target Price: 13.60 |
OSK Research Sdn Bhd has upgraded LPI Capital Bhd to a 'buy' from 'neutral' with an unchanged fair value of RM13.60.
In a research note today, OSK said LPI Capital was expected to continue to create long-term shareholder value through unremitting growth and robust results given the group's resilient performance and strong fundamentals.
OSK said LPI Capital's net profit for the nine months of financial year 2011 jumped 14.1 per cent year-on-year (yoy), thanks to better underwriting surplus, which expanded on 21.2 per cent yoy surge in gross premium as well as healthier investment income (+29 per cent).
"The higher underwriting numbers also fuelled a 12 per cent yoy growth in pre-tax profit," it said.
OSK said LPI Capital's underwriting surplus expanded by 18.3 per cent yoy, propped up by more robust growth in gross premium.
"The growth was mainly attributed to the cargo, hull aviation and offshore segment, fire, and followed by the motor segment," it said.
It said with stringent risk selection and management surplus in place, LPI Capital has managed to tame its claims ratio to 48.1 per cent from 48.4 per cent in the same period last year. -- BERNAMA
January 12, 2011
LPI - LPI Capital's earnings in line with expectations
Stock Name: LPI
Company Name: LPI CAPITAL BHD
Research House: RHB
LPI Capital Bhd
(Jan 12, RM13.96)
Maintain 'underperform' at RM13.90 with fair value of RM12.37: LPI recorded 4QFY12/10 net profit of RM36.9 million (+2% q-o-q) bringing its full-year FY10 earnings to RM137.9 million (+9.4% y-o-y). This accounted for 98% and 99% of our and consensus full-year estimates respectively.
LPI declared a second single-tier interim dividend of 45 sen, bringing total dividends declared to 55 sen year-to-date, implying a net payout of 86%, higher than our forecast 74% payout.
LPI's 12M10 earnings grew by 9.4% y-o-y, on the back of revenue growth of 12.6%. Gross premiums grew by 12% during the year of which 34% was ceded to reinsurers, similar to FY09's 35% reinsurance ratio. The lower reinsurance ratio, combined with the 12% premium growth and a lower combined ratio for FY10 of 76.2% (FY09: 76.9%), resulted in 19.1% growth in underwriting surplus.
LPI's combined ratio showed improvement y-o-y in both its commission and management expenses by one percentage point (ppt) and 0.4 ppt respectively, which more than offset the higher claims ratio of 47.8% (+0.6 ppt y-o-y).
It was recently announced that beginning this year, employers are required to purchase medical insurance coverage for each foreign worker, at an annual premium of RM120 per employee. We believe this new business will be worth a total of RM200 million, based on an estimated 1.8 million foreign workers currently in Malaysia.
We believe LPI will be able to derive incremental revenues from this new business and we expect it to be profitable given: 1) a limit of RM10,000 claims per employee; and 2) claims can only be made at government hospitals, which are cheaper than private hospitals. However, given that it is a small business in total and the estimated impact towards LPI's bottomline is expected to be minimal, we are leaving our forecasts unchanged for the time being.
Risks included change in government policy that may result in lower car prices; jump in claims ratio; combined ratio may exceed 100%; and intense competition from the insurance sector liberalisation.
In our 2011 sector strategy report, we adjusted LPI's FY10-12 claims ratio assumptions which subsequently raised our earnings forecasts by 5%-13%. We are not making any further changes for the time being. We introduce our FY13 forecast.
Our fair value is RM12.37 (post earnings revision in 2011 sector strategy report) based on unchanged target 16 times FY11 EPS. Maintain 'underperform'. ' RHB Research Institute, Jan 12
This article appeared in The Edge Financial Daily, January 13, 2011.
Company Name: LPI CAPITAL BHD
Research House: RHB
LPI Capital Bhd
(Jan 12, RM13.96)
Maintain 'underperform' at RM13.90 with fair value of RM12.37: LPI recorded 4QFY12/10 net profit of RM36.9 million (+2% q-o-q) bringing its full-year FY10 earnings to RM137.9 million (+9.4% y-o-y). This accounted for 98% and 99% of our and consensus full-year estimates respectively.
LPI declared a second single-tier interim dividend of 45 sen, bringing total dividends declared to 55 sen year-to-date, implying a net payout of 86%, higher than our forecast 74% payout.
LPI's 12M10 earnings grew by 9.4% y-o-y, on the back of revenue growth of 12.6%. Gross premiums grew by 12% during the year of which 34% was ceded to reinsurers, similar to FY09's 35% reinsurance ratio. The lower reinsurance ratio, combined with the 12% premium growth and a lower combined ratio for FY10 of 76.2% (FY09: 76.9%), resulted in 19.1% growth in underwriting surplus.
LPI's combined ratio showed improvement y-o-y in both its commission and management expenses by one percentage point (ppt) and 0.4 ppt respectively, which more than offset the higher claims ratio of 47.8% (+0.6 ppt y-o-y).
It was recently announced that beginning this year, employers are required to purchase medical insurance coverage for each foreign worker, at an annual premium of RM120 per employee. We believe this new business will be worth a total of RM200 million, based on an estimated 1.8 million foreign workers currently in Malaysia.
We believe LPI will be able to derive incremental revenues from this new business and we expect it to be profitable given: 1) a limit of RM10,000 claims per employee; and 2) claims can only be made at government hospitals, which are cheaper than private hospitals. However, given that it is a small business in total and the estimated impact towards LPI's bottomline is expected to be minimal, we are leaving our forecasts unchanged for the time being.
Risks included change in government policy that may result in lower car prices; jump in claims ratio; combined ratio may exceed 100%; and intense competition from the insurance sector liberalisation.
In our 2011 sector strategy report, we adjusted LPI's FY10-12 claims ratio assumptions which subsequently raised our earnings forecasts by 5%-13%. We are not making any further changes for the time being. We introduce our FY13 forecast.
Our fair value is RM12.37 (post earnings revision in 2011 sector strategy report) based on unchanged target 16 times FY11 EPS. Maintain 'underperform'. ' RHB Research Institute, Jan 12
This article appeared in The Edge Financial Daily, January 13, 2011.
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