Kenanga sees reassurance in Syarikat Takaful’s resilience
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00:00 This midweek, we take a look at Syarikat Takaful where Kenanga Research is keeping its outperformed
00:05 call after a briefing it had with the company that gave it a better sense of its operations.
00:10 It has a RM4.10 target price which implies a possible 14% upside.
00:15 In the first half of FY23, Takaful saw an 18% year-on-year increase in Takaful revenue.
00:21 From the family Takaful end, credit-related products remain as the lion's share, accounting
00:25 for about 80% of its portfolio.
00:28 On the flip side, Kenanga actually gathered that general Takaful mostly gained thanks
00:32 to a growing motor exposure.
00:34 Contractual service margin or CSM replenishment seems to be intact.
00:39 Under the new MFRS17 standards, Kenanga notes that the group had reported a CSM book of
00:44 $1.25 billion which would be recognised across the tenure of its written policies.
00:49 In the first half of FY22, Takaful reported deep losses in investment fair value which
00:55 undermine all its overall returns.
00:57 Meanwhile, first half FY23, net investment income doubled to $250.1.9 million thanks
01:04 to better trading sentiment which uplifted equities and fixed income asset performances
01:09 which Kenanga believes could sustain it through FY23.
01:13 Kenanga believes Takaful's sole office, a distinctive opportunity as a return of trading
01:17 sentiment could translate into demand for sharia alternatives.
01:21 According to Bloomberg, there are seven buys and one so-ho from Afin Hwang IB on Takaful
01:26 according to the latest data.
01:28 This works out to an average target price of RM4.31 which is 72 cent more than its last
01:33 close.
01:33 [music]