TUNEINS (5230) - Tune Ins Holdings Bhd - Singing a positive tune
Target RM3.00 (Stock Rating: ADD)
The meeting with Tune Ins’ CEO reaffirms our positive stance on the company. The CEO envisages bright prospects for 2015, partly due to the maiden full-year contributions from its ventures in Thailand and MENA. It plans to forge another 1-2 more tie-ups with other airlines this year and complete the M&As in Indonesia in 1H15. We trim our FY15 EPS forecasts to factor in the RM1m claims for the floods in Malaysia but retain our DDM-based target price (COE of 9.2%; LT growth of 5%). Tune remains an Add, catalysed by the swift expansion of the travel insurance (TI) business in the region with the new markets in MENA and non-life insurance unit in Thailand.
What Happened
Today, we had the first small-group meeting with Tune Ins’ new CEO, Junior N. Cho. Our key takeaway was the CEO’s positive views for the company’s earnings outlook in 2015, partly due to its venture into the MENA region. Other highlights are (1) good growth prospects in Thailand, for overall non-life insurance business, (2) the claims for the QZ8501 to be fully borne by its reinsurer, (3) targeting new tie-ups with 1-2 airlines this year, and (4) its plan to conclude the M&A in Indonesia by 1H15. The new information we gathered was that the total claims from the flood would amount to a maximum of RM1m.
What We Think
The above is in line with our positive stance on the group’s growth prospects, primarily for its TI business. In 2015, it will see maiden full-year contributions from its venture into the MENA region and Thailand. It is working on new collaborations in MENA, which would enhance earnings in the longer term if they materialise. Other potential earnings catalysts are (1) tie-ups with other airlines and (2) M&As in Indonesia.
The operating environment for its non-life insurance business in Malaysia would remain challenging. Its key initiatives for Malaysia are (1) increasing the contributions from more profitable businesses like the coverage for personal accident, (2) launching more innovative products and (3) exploiting digital networks to distribute more products.
What You Should Do
We advise investors to accumulate the stock, which has a unique proposition from its focus on the fast-growing and high-margin travel insurance business.
Source: CIMB Daybreak - 22 January 2015
Target RM3.00 (Stock Rating: ADD)
The meeting with Tune Ins’ CEO reaffirms our positive stance on the company. The CEO envisages bright prospects for 2015, partly due to the maiden full-year contributions from its ventures in Thailand and MENA. It plans to forge another 1-2 more tie-ups with other airlines this year and complete the M&As in Indonesia in 1H15. We trim our FY15 EPS forecasts to factor in the RM1m claims for the floods in Malaysia but retain our DDM-based target price (COE of 9.2%; LT growth of 5%). Tune remains an Add, catalysed by the swift expansion of the travel insurance (TI) business in the region with the new markets in MENA and non-life insurance unit in Thailand.
What Happened
Today, we had the first small-group meeting with Tune Ins’ new CEO, Junior N. Cho. Our key takeaway was the CEO’s positive views for the company’s earnings outlook in 2015, partly due to its venture into the MENA region. Other highlights are (1) good growth prospects in Thailand, for overall non-life insurance business, (2) the claims for the QZ8501 to be fully borne by its reinsurer, (3) targeting new tie-ups with 1-2 airlines this year, and (4) its plan to conclude the M&A in Indonesia by 1H15. The new information we gathered was that the total claims from the flood would amount to a maximum of RM1m.
What We Think
The above is in line with our positive stance on the group’s growth prospects, primarily for its TI business. In 2015, it will see maiden full-year contributions from its venture into the MENA region and Thailand. It is working on new collaborations in MENA, which would enhance earnings in the longer term if they materialise. Other potential earnings catalysts are (1) tie-ups with other airlines and (2) M&As in Indonesia.
The operating environment for its non-life insurance business in Malaysia would remain challenging. Its key initiatives for Malaysia are (1) increasing the contributions from more profitable businesses like the coverage for personal accident, (2) launching more innovative products and (3) exploiting digital networks to distribute more products.
What You Should Do
We advise investors to accumulate the stock, which has a unique proposition from its focus on the fast-growing and high-margin travel insurance business.
Source: CIMB Daybreak - 22 January 2015
