Takaful Malaysia - Islamic Insurance

Company :  Syarikat Takaful Malaysia Keluarga Berhad

 

Business : Insurance business breakdown to family Takaful (life + medical) and general Takaful (fire, motor, travel etc). Company also has business in Indonesia but Malaysia is still the largest contributor.

 

Clear growth of CAGR for revenue and PAT. PE of 8.35 is fair although some peers have lower PE.

 

 

Clear trend of growth and disrupted in 2020 due to COVID. However, 2021 seems picking up again. 

Revenue Split:

The revenue split between family and general takaful is approx. 70% to 30%. Under General Takaful motor is the largest contributor of 66%.

 Comparison with peer

 

Company	AIG	LPI	TAKAFUL
Price (RM)	13	13	3.7
PE	4.8	15.18	8.35
Revenue (latest FY)	5.9B	1.6B	2.9B
Profit Margin (%)	7.7	21.4	11.7
CAGR Revenue	5.6	4.8	10.6
CAGR PAT	11	1	18.4
Dividen Yield	4.80%	5.15%	3%
ROE (%)	11.57	17.97	21.94
(Efficiency to generate profit)
Dividen payment	Yes	Yes	Yes
Nos shares (million)	177.51	398.38	835.62

 

Comparison on potential 30% share price appreciation:

Company	Allianz	LPI	Takaful
Current price	13.04	13.98	3.66
30% appreciation	16.95	18.17	4.76
Peak price	16	17	7

 

 Lates result at glance

Generally lower due to COVID lockdown.

 

Prospect:

• Recovery play
• Capturing mass market & civil servants (leading position)
• Islamic insurance gaining popularity
• Digitalize marketing and online distribution

 

 

Risk:

• More death claims and surrender of policy (effects from Covid)
• Indonesia business affected.

 

Dividen every year end. Dividen yield is around 3% but pay only once a year.

 

Technical Analysis on Chart:

 

On the down trend due to heavy dumping from EPF. There is no clear sign of support at this moment. Price is actually very attractive.

 

At time of writing, I don’t have any Takaful shares yet but planning to make an entry.