source: [thestar online]
CIMB Research maintains Tune Ins target price at RM2.55
KUALA LUMPUR: CIMB Equities Research is retaining its target price of RM2.55 forTune Insurance, which is 34.2% above the current price of RM1.90.
It said on Tuesday Tune Ins’s 9M13 net profit topped expectations as it was at 76% of its full-year forecast and 75% of consensus,.
“The variance came from a surprisingly low tax rate of 5.5%, partly arising from RM2.7mil tax relief from the payment to the Malaysian Motor Insurance Pool (MMIP),” it said.
CIMB Research raised the FY13 EPS forecast by 4% as it lowered its assumed tax rate from 22% to 19%.
“We retain our Outperform call due to the catalysts of swift expansion of the travel insurance business and an EPS-accretive acquisition in Indonesia.
“We are positive on the jump in the growth in the travel insurance (TI) business. This unit posted a 45.2% on-year surge in 9M13 revenue and a 40.5% jump in pretax profit. Tune Ins’s overall none-month pretax growth was even stronger, at 64.6% on-year with the inclusion of the earnings from the general insurance unit in Malaysia, which was acquired on May 23, 2012,” it said.
