Showing posts with label LPI Capital. Show all posts
How much the LPI Capital worth at 2013 by using Dividend Valuation Method?
| Est. 2013 | 2012 | 2011 | 2010 | 2009 |
| 85.00 | 75.80 | 70.10 | 63.80 | 58.80 |
| 75.00 | 65.00 | 75.00 | 55.00 | 67.50 |
| ? | 4.47 | 5.55 | 4.17 | 4.93 |
Assuming with Q4 EPS is 27.5 sen (same as Q3) and full year dividend is 75 sen.
If we value the stock which able to give a 4.5 % dividend yield at FY2013. Then LPI Capital is fully value at RM 16.67 this year.
Again, if we value the stock at 4% dividend yield, then the stock should be valued at RM18.75.
Therefore, LPI should be traded at the range between RM16.75 and RM18.75.
Tag :
LPI Capital
LPI Capital Q3 earnings up 26.7% to RM60.35m
LPI Capital Bhd’s earnings rose 26.7% to RM60.35mil in the third quarter ended Sept 30, 2013 from RM47.63mil a year ago on higher underwriting profit by its unit Lonpac Insurance Bhd (Lonpac).
It said on Tuesday the revenue rose 10.6% to RM283.51mil from RM256.31mil. Earnings per share were 27.4 sen compared with 21.62 sen.
Commenting on the group's performance for the quarter, Tan Sri Teh Hong Piow, who is the founder and chairman said: "The third quarter has been challenging with continuing uncertainties in the global economies and the stiff competition in the insurance market.
“Nonetheless, our discipline and prudency on risk selection and claims management have enabled us to reduce the claims incurred ratio from 46% to 44% and the combined ratio from 73% to 69% for the third quarter in 2013 as compared to the previous corresponding quarter. All classes of insurance continued to register underwriting surplus."
For the nine-months period, its earnings rose 24.6% to RM149.05mil from RM119.54mil in the previous corresponding period. He said the underwriting profit of Lonpac for the same period improved remarkably by 27.8% from RM100.7mil to RM128.7mil. Its revenue rose at a slower pace of 7.4% to RM824.37mil from RM767.39mil a year ago. LonPac’s gross premium income of Lonpac improved by 5.3% to RM862.4mil.
"The group's balance sheet is strong and healthy with total assets standing at RM3.11bil, 16% higher than the previous corresponding period. Likewise, the investment portfolio remains stable with improved investment income for the nine months period,” he said. - The Star
It said on Tuesday the revenue rose 10.6% to RM283.51mil from RM256.31mil. Earnings per share were 27.4 sen compared with 21.62 sen.
Commenting on the group's performance for the quarter, Tan Sri Teh Hong Piow, who is the founder and chairman said: "The third quarter has been challenging with continuing uncertainties in the global economies and the stiff competition in the insurance market.
“Nonetheless, our discipline and prudency on risk selection and claims management have enabled us to reduce the claims incurred ratio from 46% to 44% and the combined ratio from 73% to 69% for the third quarter in 2013 as compared to the previous corresponding quarter. All classes of insurance continued to register underwriting surplus."
For the nine-months period, its earnings rose 24.6% to RM149.05mil from RM119.54mil in the previous corresponding period. He said the underwriting profit of Lonpac for the same period improved remarkably by 27.8% from RM100.7mil to RM128.7mil. Its revenue rose at a slower pace of 7.4% to RM824.37mil from RM767.39mil a year ago. LonPac’s gross premium income of Lonpac improved by 5.3% to RM862.4mil.
"The group's balance sheet is strong and healthy with total assets standing at RM3.11bil, 16% higher than the previous corresponding period. Likewise, the investment portfolio remains stable with improved investment income for the nine months period,” he said. - The Star
Tag :
LPI Capital
Harimau Capital Balance Model Portforlio
Model Portfolio Name : Harimau Capital Balance
Initial Investment Fund : RM50,000
Portfolio Starting Date : 01-Sep-2013
Additional Monthly RM2000 Investment Fund will be added into the Portfolio
Below are the today share buy transaction to kick start the HC Balance Model Portfolio
Initial Investment Fund : RM50,000
Portfolio Starting Date : 01-Sep-2013
Additional Monthly RM2000 Investment Fund will be added into the Portfolio
Below are the today share buy transaction to kick start the HC Balance Model Portfolio
LPI Capital posts higher Q1 gross profit
LPI Capital Bhd posted a higher pre-tax profit of RM51.09 million for the first quarter ended March 31, 2013, compared
with RM37.82 million in the same quarter of last year. Revenue rose to RM258.47 million from RM246.06 million previously.
In a filing to Bursa Malaysia today, the company attributed the increase in pre-tax profit mainly to the general insurance segment. "The higher revenue also came from the general insurance segment which registered a significant growth of 4.9 per cent to RM241.3 million over the corresponding quarter in 2012," it added.
with RM37.82 million in the same quarter of last year. Revenue rose to RM258.47 million from RM246.06 million previously.
In a filing to Bursa Malaysia today, the company attributed the increase in pre-tax profit mainly to the general insurance segment. "The higher revenue also came from the general insurance segment which registered a significant growth of 4.9 per cent to RM241.3 million over the corresponding quarter in 2012," it added.
On prospects, LPI Capital is confident it will maintain its earnings momentum and continue to report good results for the next quarter of the year.
The Group’s strategy is to continue focusing on organic growth to increase its market share and maintain an overall favourable operating performance. We will focus our growth primarily on our traditional distribution channels of agency and bancassurance, as well as global partnership and broking business.
Tag :
LPI Capital
为壮大实力与规模 伦平保险不断招揽人才
享有高利润的保险商伦平资本有限公司（LPI，8621，金融组），将不会采取昂贵合并与收购途径，以在区域内扩充。
反之，它将专注于催谷其代表能力，从过去18个月的大规模统一的行业中，向其他保险商征聘有才能人士。
伦平保险有限公司首席执行员陈国源说，随着2015年行业自由化容许更高外资拥有权水平的到来，该集团看到马来西亚市场越来越具竞争性。
伦平保险是伦平资本的独资拥有主要保险经营支臂。 他透露：“我们将面对公认和更资本化的更大型环球公司。我们需要透过加强我们本身的基础，以迎接这些竞争。” 为来临的自由化作准备，伦平资本将专注于组织成长。 “我们将扩大我们的代理基础，及扩充我们此间的分行网络，从而我们可建立我们的市场份额。” 伦平资本现享有6%市场份额，他希望这个数字每年可增长至少1%。
也是伦平资本非执行董事是陈国源称：“董事部不相信合并与收购是建立市场份额的途径。若我们的团队可组织性成长，公司将会更加稳定。” 陈国源相信行业内将有更多合并与收购行动，领导统一和减少业者数字。 “它将会有更少的保险公司，但它们将会更庞大和稳定。这是我们看到的机会。” “其他同业将合并后令不满的客户、员工、代理和人才离开。这是我们将会吸收的。” 代理的动向将容许伦平资本吸纳人才和建立其员工力量。
它现拥有1006名代理，并放眼每年可增加约10%至15%。 陈国源指出：“代理数字的增加是我们的目标，因代理控制大量的中小型企业组织。” “中小型企业火险和住宅保险的索款比例分别低于50%及30%，为伦平资本带来盈利。” 代理所带来的收益是最大收入来源，贡献其总保费约40%，而相关大股东大众银行有限公司（PBBANK，1295，金融组）的业务，则占集团收支约25%。
透过大众银行的海外分行，伦平资本也在柬埔寨和新加坡拥有业务，并计划进军该银行立足的其他地区。 虽然伦平资本的海外业务仅贡献小额盈利予集团整体保费，但陈国源对公司最近重组将协助集团带来更大盈利乐观。 “我们在新加坡表现不佳，因当地的竞争非常激烈，但透过重组当地业务，我们看到业绩提升。” 陈国源预测，该岛国分行今年将成长及更多予公司的收支。它目前占了集团总投保额的少过10%，和净盈利少于5%。
“我们看到柬埔寨市场的潜质，这个市场从第一天开始即有利可图，及带来约5%的总投保额。” 这项名为柬埔寨伦平保险的投资，是大众银行与伦平资本之间的联营，其中前者持有55%股分。 陈国源对印度支那国家保险业前景乐观，因他预期来自日本和中国的海外直接投资增长。 “柬埔寨保险业价值只有3000万美元（9270万令吉），但受到提高的海外直接投资带动，它成长非常迅速。” 由于柬埔寨市场只拥有6个业者，伦平资本放眼在其他业者进军之前，建立更强稳的基础。 陈国源表示，伦平资本也探讨在东盟的更多扩充机会，但首先将衡量业务和市场潜质，以及资本需求。 “我们将探讨新市场如寮国和越南，因大众银行已经立足当地，同时市场并没有太多竞争。”
尽管如此，伦平资本将继续专注于成长国内市场。 “我们计划设立新分行以加强我们的地位。” 伦平资本拥有21间分行遍布马来西亚，其中一些较大的州属拥有2或更多分行。 在伦平资本的展望方面，陈国源指出，他对行业有信心，并预期公司未来数年内将成为一个主要业者。 “我们目标每年平均收益成长15%，我相信我们将为行业带来良好的投保。” 陈国源披露，该公司将继续派发合理股息。 他续称，去年集团总共派发每股65仙的净股息，或占集团净盈利的85%。 光华日报
伦平保险是伦平资本的独资拥有主要保险经营支臂。 他透露：“我们将面对公认和更资本化的更大型环球公司。我们需要透过加强我们本身的基础，以迎接这些竞争。” 为来临的自由化作准备，伦平资本将专注于组织成长。 “我们将扩大我们的代理基础，及扩充我们此间的分行网络，从而我们可建立我们的市场份额。” 伦平资本现享有6%市场份额，他希望这个数字每年可增长至少1%。
也是伦平资本非执行董事是陈国源称：“董事部不相信合并与收购是建立市场份额的途径。若我们的团队可组织性成长，公司将会更加稳定。” 陈国源相信行业内将有更多合并与收购行动，领导统一和减少业者数字。 “它将会有更少的保险公司，但它们将会更庞大和稳定。这是我们看到的机会。” “其他同业将合并后令不满的客户、员工、代理和人才离开。这是我们将会吸收的。” 代理的动向将容许伦平资本吸纳人才和建立其员工力量。
它现拥有1006名代理，并放眼每年可增加约10%至15%。 陈国源指出：“代理数字的增加是我们的目标，因代理控制大量的中小型企业组织。” “中小型企业火险和住宅保险的索款比例分别低于50%及30%，为伦平资本带来盈利。” 代理所带来的收益是最大收入来源，贡献其总保费约40%，而相关大股东大众银行有限公司（PBBANK，1295，金融组）的业务，则占集团收支约25%。
透过大众银行的海外分行，伦平资本也在柬埔寨和新加坡拥有业务，并计划进军该银行立足的其他地区。 虽然伦平资本的海外业务仅贡献小额盈利予集团整体保费，但陈国源对公司最近重组将协助集团带来更大盈利乐观。 “我们在新加坡表现不佳，因当地的竞争非常激烈，但透过重组当地业务，我们看到业绩提升。” 陈国源预测，该岛国分行今年将成长及更多予公司的收支。它目前占了集团总投保额的少过10%，和净盈利少于5%。
“我们看到柬埔寨市场的潜质，这个市场从第一天开始即有利可图，及带来约5%的总投保额。” 这项名为柬埔寨伦平保险的投资，是大众银行与伦平资本之间的联营，其中前者持有55%股分。 陈国源对印度支那国家保险业前景乐观，因他预期来自日本和中国的海外直接投资增长。 “柬埔寨保险业价值只有3000万美元（9270万令吉），但受到提高的海外直接投资带动，它成长非常迅速。” 由于柬埔寨市场只拥有6个业者，伦平资本放眼在其他业者进军之前，建立更强稳的基础。 陈国源表示，伦平资本也探讨在东盟的更多扩充机会，但首先将衡量业务和市场潜质，以及资本需求。 “我们将探讨新市场如寮国和越南，因大众银行已经立足当地，同时市场并没有太多竞争。”
尽管如此，伦平资本将继续专注于成长国内市场。 “我们计划设立新分行以加强我们的地位。” 伦平资本拥有21间分行遍布马来西亚，其中一些较大的州属拥有2或更多分行。 在伦平资本的展望方面，陈国源指出，他对行业有信心，并预期公司未来数年内将成为一个主要业者。 “我们目标每年平均收益成长15%，我相信我们将为行业带来良好的投保。” 陈国源披露，该公司将继续派发合理股息。 他续称，去年集团总共派发每股65仙的净股息，或占集团净盈利的85%。 光华日报
Tag :
LPI Capital
LPI CAPITAL BHD achieves 1 billion revenue on 2012
LPI CAPITAL BHD ACHIEVES ONE BILLION IN REVENUE AND HIGHER PRE-TAX PROFIT FOR THE YEAR 2012
Commenting on the Group’s performance, Tan Sri Dato’ Sri Dr. Teh Hong Piow, Founder and Chairman of the Group said, “2012 has been a challenging year, dominated by the continuing Euro zone crisis and the looming threat of the US fiscal cliff as well as the exceptionally high frequency of fire losses and the unprecedented rise in motor claims, particularly theft losses and escalating court awards for accident fatalities and bodily injury claims.”
The Chairman said, "The resilience of Lonpac’s business model is a testament of the robustness of the company's business diversity and justifies our controlled appetite for risk acceptance. Lonpac continues to exercise and enjoy a culture that is driven by a strong commitment and a narrowed focus on underwriting discipline and good risk management. Our prudent underwriting policy has consistently produced improved underwriting results for all classes of business over the past years.”
Tan Sri Teh highlighted, “The improved performance for the 4th quarter saw an increase of 20% in pre-tax profit of RM62.6 million and consequently a better pre-tax profit of RM214.0 million for the whole year of 2012. Net profit attributable to shareholders rose by 8.0% from RM154.5 million to RM166.9 million bringing the Group’s earnings per share to 75.8 sen as compared to 70.1 sen achieved last year.”
Tan Sri Teh announced that, “In view of the Group’s encouraging performance, a second interim single tier dividend of 50 sen has been declared by the Board”.
“The second interim dividend payment which amounted to RM110.2 million is part of the Group’s endeavour to reward its shareholders. The total net dividend paid and payable for the year is RM143.2 million,” emphasised Tan Sri Teh.
“Although there are considerable uncertainties in the global economy with the Euro zone crisis as the greatest threat to the world economy at present, the outlook for the Malaysian economy remains stable, supported by continued strong domestic consumption and investment. The ongoing implementation of the Economic Transformation Programme will continue to drive both public and private investments,” said Tan Sri Teh.
Tan Sri Teh cautioned, "The Risk Base Capital (RBC) requirement introduced by Bank Negara Malaysia in 2009 and the pending liberalisation of the insurance sector have intensified competition and saw a few consolidations during the year. The Group’s strategy is to continue focusing on organic growth to increase market share and maintain an overall favorable operating performance. On the upside, however, the Group’s robust business plan and strong balance sheet, which are built on a broad foundation, have positioned us to respond innovatively even in a persistently challenging market. We will continue to assess all business opportunities with the objective of maximising long term shareholder value.”
LPI Capital Bhd (Group) registered another strong set of results for the year 2012 with a record pre-tax profit of RM214.0 million on the back of an expanded revenue of 15%. Revenue for the Group grew substantially from RM902.7 million in 2011 to RM1,039.3 million crossing the RM1.0 Billion mark in 50 years. Likewise, the Group’s wholly-owned subsidiary Lonpac Insurance Bhd (Lonpac) also recorded more than a billion Ringgit in gross premium income reaching RM1,033.9 million which represents a 14.0% growth over the previous corresponding year.
Commenting on the Group’s performance, Tan Sri Dato’ Sri Dr. Teh Hong Piow, Founder and Chairman of the Group said, “2012 has been a challenging year, dominated by the continuing Euro zone crisis and the looming threat of the US fiscal cliff as well as the exceptionally high frequency of fire losses and the unprecedented rise in motor claims, particularly theft losses and escalating court awards for accident fatalities and bodily injury claims.”
Tan Sri Teh continued, “Despite these exceptional events, Lonpac still managed to chalk up an impressive underwriting profit of RM151.9 million as compared to RM137.9 million recorded last year, showing a commendable increase of 10.0%”. This has contributed positively to the Group’s profit before tax of RM214.0 million for the year under review.”
“The growth in underwriting profits generated by Lonpac has been the key driver to the Group’s pre-tax profit,” noted Tan Sri Teh.
"Despite operating in a highly competitive market, the Group still achieved an impressive growth rate of 15.0% and 14.0% in both revenue and gross premium income respectively," said the Chairman. He continued, “The current low interest rate and the listless equity market have no significant adverse effects on our investments. Our investment in the equity market has instead appreciated by 21.6% from RM773.1 million to RM939.8 million.”
The Chairman said, "The resilience of Lonpac’s business model is a testament of the robustness of the company's business diversity and justifies our controlled appetite for risk acceptance. Lonpac continues to exercise and enjoy a culture that is driven by a strong commitment and a narrowed focus on underwriting discipline and good risk management. Our prudent underwriting policy has consistently produced improved underwriting results for all classes of business over the past years.”
HIGHLIGHTS OF THE GROUP’S PERFORMANCE FOR THE FOURTH QUARTER AND THE YEAR :
Quarter Ended
|
Year Ended
| |||
31/12/2012
|
31/12/2011
|
31/12/2012
|
31/12/2011
| |
Revenue
(RM’000)
|
271,929
|
239,323
|
1,039,326
|
902,729
|
Gross Premium Income
(RM’000)
|
214,654
|
197,086
|
1,033,860
|
907,912
|
Earned Premium Income
(RM’000)
|
152,596
|
144,130
|
584,522
|
526,681
|
Underwriting Profit
(RM’000)
|
51,143
|
40,388
|
151,869
|
137,928
|
Profit Before Tax
(RM’000)
|
62,622
|
51,999
|
214,036
|
200,053
|
Net Profit Attributable
To Shareholders
(RM’000)
|
47,385
|
39,334
|
166,925
|
154,494
|
Net Return
On Equity (%)
|
3
|
3
|
12
|
13
|
Earnings Per Share
|
21.51 sen
|
17.85 sen
|
75.77 sen
|
70.13 sen
|
Claims Incurred Ratio
(%)
|
40
|
50
|
48
|
49
|
Management Expense Ratio (%)
|
18
|
16
|
19
|
18
|
Commission Ratio (%)
|
9
|
6
|
8
|
7
|
Combined Ratio (%)
|
67
|
72
|
75
|
74
|
Strong Profit Performance
Tan Sri Teh highlighted, “The improved performance for the 4th quarter saw an increase of 20% in pre-tax profit of RM62.6 million and consequently a better pre-tax profit of RM214.0 million for the whole year of 2012. Net profit attributable to shareholders rose by 8.0% from RM154.5 million to RM166.9 million bringing the Group’s earnings per share to 75.8 sen as compared to 70.1 sen achieved last year.”
Strong Momentum in Revenue and Premium Growth
The Group created a new milestone with revenue and gross premium income crossing the ONE BILLION RINGGIT mark. This achievement is more evocative as the increased premium income translated into better underwriting results.
“It is inspiring to note that the strong growth in premium income was achieved without compromising on the quality of our risk selection. The Group will continue to expand in profitable lines of business,” commented Tan Sri Teh.
Tan Sri Teh said, “The Group’s strong balance sheet and effective capital allocation process provide us with the necessary flexibility to appropriately direct and deploy resources to business lines that are profitable. Our attention to quality risk selection and risk management remained undiminished. The Group will continue to enhance its delivery system to be more cost effective.”
Strong Balance Sheet
Tan Sri Teh continued, “The Group’s balance sheet is strong and healthy with total assets standing at RM2,749.3 million, 14.0% higher than that of the corresponding year.
“The Group’s shareholders’ funds also increased to RM1,372.7 million from RM1,181.6 million with an encouraging return on equity of 12.0%. The Group’s total investment portfolio remains stable and returns on its investments are not anticipated to change significantly.”
Dividend Payment
Tan Sri Teh announced that, “In view of the Group’s encouraging performance, a second interim single tier dividend of 50 sen has been declared by the Board”.
“The second interim dividend payment which amounted to RM110.2 million is part of the Group’s endeavour to reward its shareholders. The total net dividend paid and payable for the year is RM143.2 million,” emphasised Tan Sri Teh.
Future Prospects
“Although there are considerable uncertainties in the global economy with the Euro zone crisis as the greatest threat to the world economy at present, the outlook for the Malaysian economy remains stable, supported by continued strong domestic consumption and investment. The ongoing implementation of the Economic Transformation Programme will continue to drive both public and private investments,” said Tan Sri Teh.
Tan Sri Teh cautioned, "The Risk Base Capital (RBC) requirement introduced by Bank Negara Malaysia in 2009 and the pending liberalisation of the insurance sector have intensified competition and saw a few consolidations during the year. The Group’s strategy is to continue focusing on organic growth to increase market share and maintain an overall favorable operating performance. On the upside, however, the Group’s robust business plan and strong balance sheet, which are built on a broad foundation, have positioned us to respond innovatively even in a persistently challenging market. We will continue to assess all business opportunities with the objective of maximising long term shareholder value.”
Tag :
LPI Capital
LPI FY12Q1 net profit lower due to higher claims
PETALING JAYA: LPI Capital Bhd recorded 18.51% decrease in net profit to RM31.5mil for its first quarter ended March 31 compared with RM38.6mil in the corresponding quarter due to higher claims.
The insurer, however, posted a 15.3% increase in revenue to RM246.061mil compared with RM213.328mil in the corresponding quarter last year.
The growth in revenue was contributed mainly by the general insurance segment, which grew 18.6% to RM230mil over the corresponding quarter in 2011.
Teh: ‘Our disciplined approach in risk selection and management allowed us to make controlled progress in executing our business plan for 2012.’
The increase was mainly contributed by higher gross earned premium for the quarter, which was in line with the strategic planning and business efforts of the group in growing the profitable insurance business.
Chairman Tan Sri Teh Hong Piow said the drop in profit was mainly due to the high frequency of catastrophic losses, and the unprecedented increased number of fire and motor claims, timing differences in accounting for the enlarged gross premium income through the provision of unearned premium reserves, and reduced investment income received.
“The unearned premium reserves as at March 31 stood at RM363.6mil rising by a whopping 15%.
“These extraordinary events have impacted our earnings adversely. Nevertheless, our disciplined approach in risk selection and management allowed us to make controlled progress in executing our business plan for 2012.
“With improved market recognition, our business units are in an excellent position to implement their respective growth strategies as reflected in the increased premium income for the first quarter of the year. Premium written for our core business has grown,” he said in a statement yesterday.
In an announcement to Bursa Malaysia, the group said that it was confident of increasing its market share and maintaining favourable growth.
It was also confident that it would maintain its earnings momentum and deliver satisfactory performance going forward.
“The challenges facing the global developed economies remained unabated and this has a negative effect on our market environment.
“We will continue to execute our business plan with a steadfast caution and agility.
“Our commitment to upholding strong corporate governance and create long-term shareholder value through unremitting growth and profitable results remains undiminished.
“The group is therefore confident that it would record better performance for the next quarter of the year,” Teh said. From: The Star Business
LPI Capital Bhd 10Yrs++ Financial Summary
LPI
LPI Capital Bhd (“LPI”), previously known as London & Pacific Insurance Company Berhad, is an investment holding company. The Company changed its name to LPI Capital Bhd and transferred its entire insurance business to a wholly owned subsidiary, Lonpac Insurance Bhd (“Lonpac”) after a rationalisation scheme on 1 May 1999.
LPI was established on 24 May 1962 as a private limited company and was registered as an approved insurer on 9 April 1963 under the Malaysian Insurance Act, 1963. LPI shares were listed on the Second Board of Bursa Malaysia Securities Berhad (“Bursa Securities”) on 8 January 1993 and subsequently were transferred to the Main Market of Bursa Securities on 17 January 1997.
Core Business LPI Group remains significantly focused on its core business in the general insurance market through its wholly-owned insurance subsidiary. It offers a wide range of general insurance products and services covering various general insurance classes namely, property, liability, pecuniary, employees’ benefits, projects, motor, marine as well as personal products insurances. Both fire and motor classes occupy 1/3 each of the gross written premium.
LPI to maintain 100% dividend payout ratio
"LPI Solid as a Rock" by OSK Investment Research Team
We met up with LPI’s management recently and came away from the meeting confident that the group will sustain its earnings momentum moving forward, driven by: (i) higher underwriting surplus mainly from its non-motor segments, (ii) lower claims ratio, and (iii) stronger agency force. Maintain BUY, with an unchanged FV of RM15.40, pegged to a 3-year PER of 19.4x.Solid record. LPI’s FY11 results stood strong in spite of the challenging and competitive business environment. Management is targeting to grow its gross premiums by some 15%, boosted by: (i) new businesses from strategic partners which are also global insurers, (ii) strong growth from its construction-related business, supported by the rollout of more Economic Transformation Programme (ETP) projects, and (iii) stronger growth in its marine, aviation and transit business, which is generally profitable.
We understand that management intends to strengthen its agency force as it believes that it may be able to attract agents from other insurance companies given the prevailing uncertainties arising from M&As in the industry. MMIP likely to still see 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 the Malaysian Motor Insurance Pool (MMIP). LPI’s share of MMIP losses in FY11 amounted to RM11.1m as MMIP had chalked up a cumulative shortfall over 7 quarters as at end-3Q11. We expect MMIP to continue to fall short of funds over the next two years, at an estimated RM2m–RM3m per quarter. Nonetheless, management is confident of keeping its claims ratio below 50% in tandem with its stringent underwriting practices.
Sustainable dividend payout expected. Generally seen as a dividend stock, management has guided that LPI would be able to maintain a 100% dividend payout ratio given its high capital adequacy ratio (CAR) that is well above the required 130% set by Bank Negara Malaysia. We are confident that this is possible in light of its stable cash flow outlook and net cash position.
Maintain BUY. We continue 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 the possibility of the company declaring another bonus issue or share split to reward its shareholders as well as to enhance the stock’s liquidity.
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LPI Capital
LPI Target 1 Billion Gross Premium in 2012 driven by Property Fire Insurance
LPI Capital Bhd is targeting a 10% increase in gross premium to RM1bil this year, to be driven by property insurance for infrastructure projects under the Economic Transformation Programme(ETP). The general insurer reported RM907.9 million in gross premiums last year, a 20 per cent increase, compared to RM755.9 million made in 2010.
To boost its property segment, LPI Capital chief executive Tee Choon Yeow said the group's wholly-owned subsidiary, Lonpac Insurance Bhd, would try to insure all the large infrastructure projects, such as the My Rapid Transit project, provided insurance rates and returns were attractive.
“We certainly do not want to be participating in an insurance consortium where the rates are not adequate. We will work our way to participate in most of the large projects so long as most of the terms and conditions are favourable to the insurer,” he told a press conference after LPI Capital's AGM.
"Our property business should do better this year and contribute between 37 per cent and 38 per cent to our overall gross premiums," said Tee, who is also Lonpac's adviser.
LPI also expects strong growth in its marine, aviation and transit (MAT) segment, which it expects will make a larger contribution to its overall gross premium portfolio.
For the motor business, Lonpac chief executive officer Tan Kok Guan said the target is to reduce its motor loss ratio to 75 per cent from 81.1 per cent last year. Its motor portfolio makes up almost 30% of the group's total premium. Lonpac's motor ratio took a hit last year when it suffered huge losses incurred by the Malaysian Motor Insurance Pool (MMIP), which was formed to cater the unplaced motor risk. Tan does not anticipate MMIP to lose more money this year and expects the recent motor insurance premium increases to mitigate any impact on its bottom line.
To help expand its business market, Lonpac plans to drive up its "Global Partnership" business as well as agency business and expand its branch network. The "Global Partnership" was established with foreign insurers and reinsurers to tap into their network of worldwide clients, who are conducting businesses in Malaysia. The network is expected to contribute RM60 million to Lonpac's gross premiums this year, compared to RM50 million made last year.
It now has 21 branches, with four opened last year and another three to be opened this year in peninsular Malaysia.
On the mergers and acquisitions that are said to spur the insurance sector, Lonpac Tan said the market consolidation would be an opportunity for Lonpac to expand. “When some of the companies merge with other companies, we can find opportunities to tap into their business through their client base or agents,” he said.
Tee added that despite unrelenting economic uncertainties, Lonpac was expected to sustain profitability and recurring income as “the Government has taken initiatives to make sure there will be 5.5% gross domestic product growth by way of the ETP, MyRapid Transit project and some highway projects to boost local economy.”
LPI CAPITAL BHD Achieves Higher Pre-Tax Profit For The Year 2011
LPI
Capital Bhd (Group) achieved another strong set of results for 2011
with a record pre-tax profit of RM200.1 million, representing an
increase of 10.4% from the prior year. The Group’s wholly-owned
subsidiary, Lonpac Insurance Bhd (Lonpac) contributed RM174.0 million
or 87.0% of the Group’s pre-tax profit of RM200.1 million.
Commenting
on the Group’s performance, Tan Sri Dato’ Sri Dr. Teh Hong Piow,
Founder and Chairman of the Group said, “2011 has been a challenging
year, dominated by global macroeconomic issues ranging from the
downgrade of the US credit rating to concerns over the Euro zone debt
crisis and the exceptionally high severity and frequency of natural
catastrophes, particularly the floods experienced in several locations
in the country. We are, however, not exposed to the floods in Thailand,
other than a few supplier extension covers, which are immaterial to our
results."
Tan Sri Teh noted, “Despite these exceptional
events, Lonpac still managed to chalk up an impressive underwriting
profit of RM137.9 million as compared to RM116.7 million recorded last
year, showing a commendable increase of 18.2%”. "Our results
were nevertheless negatively impacted by the huge losses incurred by the
Malaysian Motor Insurance Pool (MMIP), which was formed to cater for
unplaced motor risks. All licensed general insurers have an equal share
of participation in the pool. Our share of loss through the MMIP was
RM11.1 million. This resulted in an increase in our motor loss ratio
to 81.1% and dampened underwriting profits," he said.
He
further added, “Regardless of this misfortune Lonpac registered a
respectable fourth quarter underwriting profit of RM40.4 million.
Excluding this unprecedented and exceptional loss, Lonpac’s underwriting
profit for the year would have been RM149.0 million or an increase of
27.7%. Similarly the Group’s pre-tax profit would have been RM211.2
million, an increase of 16.5%”. "Against this difficult
backdrop, the Group still achieved an impressive growth rate of 20.1% in
both revenue and gross premium income," said the Chairman. He
continued, “The current volatile investment environment and turbulent
equity market have no significant adverse effects on our investments.
Our investment in the equity market has instead appreciated by 2.6% to
RM773.1 million.”
The Chairman said, "Lonpac's success
reflects the robustness of the company's diversified business model and
justifies our controlled appetite for risk acceptance. Lonpac continues
to exercise and enjoy a culture that is driven by a strong conviction
and a narrowed focus on underwriting discipline and good risk
management.”
HIGHLIGHTS OF THE GROUP’S PERFORMANCE FOR THE FOURTH QUARTER AND THE YEAR UNDER REVIEW :
Fourth Quarter
|
12 Months Cumulative
To Date
| |||
2010
RM’000
|
2011
RM’000
|
2010
RM’000
|
2011
RM’000
| |
Revenue
|
190,635
|
239,323
|
751,726
|
902,729
|
Gross Premium Income
|
169,582
|
197,086
|
755,931
|
907,912
|
Earned Premium Income
|
126,188
|
144,130
|
462,510
|
526,681
|
Underwriting Profit
|
38,696
|
40,388
|
116,653
|
137,928
|
Profit Before Tax
|
49,135
|
51,999
|
181,307
|
200,053
|
Net Profit attributable
To Shareholders
|
36,937
|
39,334
|
137,908
|
154,494
|
Annualized net return
On Equity
| ||||
16.77 sen
|
17.85 sen
|
63.83 sen
|
70.13 sen
| |
Claims Incurred Ratio
| ||||
Management expense ratio
| ||||
Commission ratio
| ||||
Combined ratio
| ||||
Strong Profit Performance
Tan
Sri Teh highlighted, “The increase in underwriting profits generated by
Lonpac was the key driver to the Group recording a higher pre-tax
profit of RM52.0 million for the quarter under review, and correspondingly, a pre-tax profit of RM200.1 million for the whole year
2011. Net profit attributable to shareholders rose by 12.0%, from
RM137.9 million to RM154.5 million. The Group’s earnings per share
increased to 70.1 sen per share as compared to 63.8 sen achieved last
year”.
Strong Momentum in Revenue and Premium Growth
The
Group’s revenue grew by 20.1% to RM902.7 million. Likewise, gross
premium income also registered a significant increase of 20.1% from
RM755.9 million to RM907.9 million written by Lonpac.
Regarding
the growth rate, Tan Sri Teh said, “ The Group’s strong balance sheet
and effective capital allocation process provide us with the necessary
flexibility to appropriately direct and deploy resources to business
lines that are profitable. Our attention to quality risk selection and
management remained undiminished. This in turn translated into an
underwriting surplus in all classes of insurance we underwrote.”
Good Corporate Governance and Strong Ratings
The
Chairman stressed that, “The Group’s commitment to enhancing
shareholder value through good corporate governance was duly recognised
by the conferment of several awards during the year, notably by the
Minority Shareholder Watchdog Group for the Most Prompt AGM Award and
Distinction Award on the Malaysian Corporate Governance Index 2011. Its
strong management of assets and liabilities and stringent internal
control in managing its operations earned an “A-“ (excellent) rating and
an issuer credit rating of “a-“ from AM Best, an international rating
agency”. “The ratings signify the Group’s financial strength
and reliability to the insuring public. They also reflect the Group’s
ability to maintain a favourable underwriting performance, even in the
challenging environment forecast for the year,” continued Tan Sri Teh.
Dividend Payment
Tan
Sri Teh announced that, “In view of the Group’s encouraging
performance, a second interim single tier dividend of 50 sen has been
declared by the Board”.
“The higher second interim dividend
payment which amounted to RM110.2 million is part of the Group’s
endeavour to reward its shareholders. The total net dividend paid and
payable for the year is RM165.2 million”, emphasised Tan Sri Teh.
Future Prospects
“The
challenges facing the global developed economies are rising rapidly
with very little evidence to suggest that there will be an imminent
solution to address these concerns. Nevertheless, the outlook for the
Malaysian economy remains positive amidst support from accommodative
fiscal and monetary policies implemented by the government. For 2012,
the economy is expected to grow by 5% to 5.5% and the insurance industry
is likely to remain resilient”, said Tan Sri Teh.
"However,"
continued Tan Sri Teh, "the number of significant catastrophes which
occurred in 2011 poses a future test for the insurance industry.
Reinsurance placements will be difficult and rates are expected to
rise. On the upside, the Group’s robust business plan and strong balance
sheet, which are built on a broad foundation, have positioned us to
respond innovatively even in a persistently challenging market. We will
continue to assess all business opportunities with the objective of
maximising long term shareholder value. Barring unforeseen
circumstances, the Group is confident it will maintain its earnings
momentum and deliver a satisfactory performance”.
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LPI Capital
Lonpac Insurance Bhd (LPI) FY 2011 Performance Review and 2012 Prospects
Review of Group Performance
The Group‟s revenue for the current quarter increased by 25.5% to RM239.3 million largely contributed by the general insurance segment which marked a commendable growth of 26.2% over the corresponding quarter. The increase was mainly contributed by higher gross earned premium for the quarter which registered an increase of RM47.4 million (25.8%) over the corresponding quarter. The increase in gross earned premium is in line with the strategic planning and business efforts of the Group in growing the profitable insurance business. The revenue from investment holding segment decreased from RM1.2 million to RM0.2 million as compared to corresponding quarter due to lower interest income received during the quarter.
With commendable growth in the gross earned premium, contained net claims incurred ratio at 50.4% and lower net commission expense, the Group managed to register a profit before tax of RM53.3 million from general insurance segment. This represents an increase of RM3.5 million (7.0%) over the corresponding quarter. After offsetting with lower profit from investment holding segment, the Group still recorded a respectable higher profit before tax of RM52.0 million, increased by RM2.9 million (5.8%) over the corresponding quarter in 2010.
The Group‟s revenue for the financial year increased by 20.1% to RM902.7 million mainly contributed by the general insurance segment which recorded a growth of 22.3%. The increase was mainly contributed by higher gross earned premium for the financial year which registered an increase of RM151.4 million (21.9%) over last year. The revenue from investment holding segment recorded a decrease of RM7.9 million to RM31.6 million as lower dividend income was received during the year.
For the financial year under review, the Group chalked up a profit before tax of RM200.1 million, which showed an increase of RM18.8 million (10.4%) compared to last year. The increase in profit before tax was contributed by the general insurance segment, which recorded a profit before tax of RM174.8 million, up by RM26.3 million from last year. Investment holding segment recorded a lower profit before tax of RM25.3 million compared to RM32.9 million last year mainly due to lower dividend income as mentioned above.
FY2012 Prospects
For the general insurance segment, in spite of the challenging and competitive business environment, LPI Capital Group is confident to increase its market share and maintain the favourable growth. The Group‟s robust business plan and strong balance sheet, which are built on a broad foundation, enable the Group to respond innovatively even in a persistently challenging market. The Group will continue to assess all business opportunities with the objective of maximising long term shareholder value.
The challenges facing the global developed economies are growing rapidly with very little evidence to suggest that there will be an imminent solution to address these concerns. This in turn may affect the investment segment of the Group. The Group views the dividend income from this segment with caution. However, the Group does not foresee it has any big impact to the overall profit as the investment segment only formed about 13% of the Group‟s total profit in the financial year 2011.
Barring unforeseen circumstances, the Group is confident it will maintain its earnings momentum and deliver a satisfactory performance.
Dividend
LPI had declared a second interim single tier dividend for the financial year ended 31 December 2011.
a.) The amount per share: 50.00 sen single tier to be paid at 2 February 2012. (The previous corresponding period for second interim single tier dividend: 45.00 sen single tier).
b. The total dividend for the financial year 2011 is 75.00 sen (55.00sen on FY2010)
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LPI Capital
