OSK Research has trimmed its earnings forecast for LPI Capital by 5.2 per cent for the financial year 2012 and 4.4 per
cent for financial year 2013, on assumption of a higher claims ratio.
"We believe that our earnings revision is justified since the group has not factored in any losses from the Malaysian Motor Insurance Pool, as well as the weaker than expected earnings in the first quarter financial year 2012," it said in its research note here today.
OSK Research said LPI Capital's first half financial year 2012 annualised earnings accounted for only 40.9 per cent of its full-year forecast due to higher than expected claims in the first quarter.
"Despite to its impressive revenue growth, we believe that its second half financial year 2012 claims ration would not exceed our estimate," it added.
The research house has maintained a "buy" call on LPI Capital with a fair value of RM15.60. "Our valuations are justifiable as the group has been consistently chalking up earnings growth and paying dividends to its shareholders," it said. -- Bernama
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