LPI Capital’s 1Q net profit surges 37%

LPI Capital’s 1Q net profit surges 37%, shares snap losing streak after results

By Hee En Qi / theedgemalaysia.com

29 Apr 2024, 01:34 pm

KUALA LUMPUR (April 29): Shares in LPI Capital Bhd snapped a three-day losing streak on Monday, after the general insurer reported a 37% net profit surge in the first quarter, thanks largely to sharply lower net expenses from reinsurance contracts held and higher investment income.

LPI had turned positive following the results announcement, and rose nearly 3% to as high as RM12.12. The stock closed at RM11.92 at 5pm, valuing the company founded by the late Tan Sri Dr Teh Hong Piow of Public Bank Bhd at RM4.75 billion. Trading volume stood at 251,900 shares at the closing bell. 

Net profit for the three months ended March 31, 2024 (1QFY2024) was RM101.29 million compared to RM73.83 million over the same period last year, LPI said in an exchange filing. Revenue for the quarter edged up 1.4% year-on-year to RM469.8 million from RM463.3 million as gross written premiums rose.

“The Malaysian insurance industry will continue to face greater competition and underwriting margins compression owing to the phased liberalisation process,” LPI said. The company said it will focus on “strategic sectors that can provide steady and sustainable profits”.

For 1QFY2024, the company’s general insurance segment — which mainly provides motor and fire insurance — reported a 30% year-on-year increase in its profit before tax to RM107.45 million from RM82.4 million, on a lower net claims incurred ratio of 40.1% in 1QFY2024, from 51.8% a year earlier.

Meanwhile, the pre-tax profit of the investment holding segment more than doubled to RM19.9 million from RM9 million, contributed by higher tax-exempt dividend income received from its equity investment.

The company “will continue to strengthen its distribution channels by forming partnerships and enhancing its collaboration with agents and bancassurance partners, to grow the desired portfolios”, LPI added.

Shares of LPI closed at RM11.92 on Monday, up 12 sen from last Friday’s close. The stock have dipped two sen or 0.17% this year, amid caution among analysts.

There are three “hold” calls out of five research houses covering the stock and two “buy” ratings. The consensus 12-month target price is RM13.13.

https://theedgemalaysia.com/node/709704

LPI at a glance

 

LPI at a glance

LPI

LPI

Its revenues grew consistently and at a rate of between 5% to 10% yearly..  However, profit before tax declined since 2016 due to shrinking profit before tax margin.  The profit before tax margin declined from a high of 37.6% in 2016 to 22.5% in 2022.   This is due to liberalization of the insurance sector and the increasing competition in the market place.

Its share price has declined at the same pace as the decline in its profit before tax and its EPS, resulting in a flattish PER. 

LPI 24.8.2017

LPI		24.8.2017
5 Years Quarterly Report History
Qtr	Financial	Revenue	PBT	PAT	PBT
No	Quarter	(RM,000)	(RM,000)	(RM,000)	Margin
2	30-Jun-17	352,710	89,216	68,064	25.3%
1	31-Mar-17	347,640	88,794	70,563	25.5%
4	31-Dec-16	355,552	106,866	81,450	30.1%
3	30-Sep-16	363,529	97,404	77,768	26.8%
2	30-Jun-16	339,250	232,474	212,619	68.5%
1	31-Mar-16	320,561	82,181	65,386	25.6%
4	31-Dec-15	338,623	125,616	102,211	37.1%
3	30-Sep-15	349,507	94,875	75,842	27.1%
2	30-Jun-15	304,726	101,829	85,739	33.4%
1	31-Mar-15	291,730	70,746	57,197	24.3%
4	31-Dec-14	299,168	133,299	117,059	44.6%
3	30-Sep-14	301,236	77,425	64,195	25.7%
2	30-Jun-14	291,491	68,551	51,181	23.5%
1	31-Mar-14	277,798	62,674	50,581	22.6%
4	31-Dec-13	294,649	71,309	52,392	24.2%
3	30-Sep-13	283,508	71,894	60,357	25.4%
2	30-Jun-13	282,398	62,507	46,579	22.1%
1	31-Mar-13	258,467	51,091	42,112	19.8%
4	31-Dec-12	271,929	62,622	47,385	23.0%
3	30-Sep-12	256,307	59,062	47,632	23.0%
5 Years Trailing 4 Quarters
No.	Financial	ttm-Rev	ttm-PBT	ttm-PAT	ttm-PBT
Qtr.	Quarter	(RM,000)	(RM,000)	(RM,000)	Margin
2	31-Dec-17	1,419,431	382,280	297,845	26.9%
1	31-Dec-17	1,405,971	525,538	442,400	37.4%
4	31-Dec-16	1,378,892	518,925	437,223	37.6%
3	31-Dec-16	1,361,963	537,675	457,984	39.5%
2	31-Dec-16	1,347,941	535,146	456,058	39.7%
1	31-Dec-16	1,313,417	404,501	329,178	30.8%
4	31-Dec-15	1,284,586	393,066	320,989	30.6%
3	31-Dec-15	1,245,131	400,749	335,837	32.2%
2	31-Dec-15	1,196,860	383,299	324,190	32.0%
1	31-Dec-15	1,183,625	350,021	289,632	29.6%
4	31-Dec-14	1,169,693	341,949	283,016	29.2%
3	31-Dec-14	1,165,174	279,959	218,349	24.0%
2	31-Dec-14	1,147,446	274,428	214,511	23.9%
1	31-Dec-14	1,138,353	268,384	209,909	23.6%
4	31-Dec-13	1,119,022	256,801	201,440	22.9%
3	31-Dec-13	1,096,302	248,114	196,433	22.6%
2	31-Dec-13	1,069,101	235,282	183,708	22.0%
1	31-Dec-13	1,051,732	227,306	177,560	21.6%
4	31-Dec-12	1,039,326	214,036	166,925	20.6%
3	31-Dec-12	1,006,720	203,413	158,874	20.2%
5 Years Adjusted EPS, DPS, NTA and ttm-EPS for capital changes
No of shares (m)		331.9
		adj	adj	adj	adj	adj
Qtr	Financial	EPS	DPS	NTA	ttm-EPS	ttm-DPS
No	Quarter	(Cent)	(Cent)	(RM)	(Cent)	(Cent)
2	30-Jun-17	20.51	27.0	5.48	89.75	82.03
1	31-Mar-17	21.26	0.0	5.23	133.31	80.04
4	31-Dec-16	24.54	55.0	5.54	131.75	80.04
3	30-Sep-16	23.43	0.0	5.29	138.01	75.03
2	30-Jun-16	64.07	25.0	5.25	137.43	75.03
1	31-Mar-16	19.70	0.0	4.96	99.19	70.03
4	31-Dec-15	30.80	50.0	5.24	96.72	70.03
3	30-Sep-15	22.85	0.0	4.87	101.20	56.62
2	30-Jun-15	25.84	20.0	5.02	97.69	56.62
1	31-Mar-15	17.24	0.0	4.89	87.28	49.88
4	31-Dec-14	35.27	36.6	4.97	85.28	49.88
3	30-Sep-14	19.34	0.0	4.85	65.80	47.79
2	30-Jun-14	15.42	13.3	4.82	64.64	47.79
1	31-Mar-14	15.24	0.0	4.60	63.25	46.46
4	31-Dec-13	15.79	34.5	4.84	60.70	46.46
3	30-Sep-13	18.19	0.0	4.39	59.19	45.14
2	30-Jun-13	14.04	12.0	4.20	55.36	45.14
1	31-Mar-13	12.69	0.0	3.93	53.50	43.15
4	31-Dec-12	14.28	33.2	4.14	50.30	43.15
3	30-Sep-12	14.35	0.0	3.66	47.87	43.16
Capital changes
No.	Financial	No of
Qtr.	Quarter	Shrs (m)
2	30-Jun-17	331.9
1	31-Mar-17	332.1
4	31-Dec-16	332.0
3	30-Sep-16	331.9
2	30-Jun-16	332.0
1	31-Mar-16	331.9
4	31-Dec-15	332.0
3	30-Sep-15	331.9
2	30-Jun-15	332.1
1	31-Mar-15	332.0
4	31-Dec-14	220.9
3	30-Sep-14	220.3
2	30-Jun-14	220.3
1	31-Mar-14	220.3
4	31-Dec-13	220.2
3	30-Sep-13	220.3
2	30-Jun-13	220.3
1	31-Mar-13	220.4
4	31-Dec-12	220.3
3	30-Sep-12	220.3
2	30-Jun-12	220.3
1	31-Mar-12	220.3
4	31-Dec-11	220.4
3	30-Sep-11	220.3