JKSB: Quarterly Highlights: People's Insurance PLC (PINS): 2QCY19
PINS reported a 41% YoY increase in earnings for 2QCY19, mainly due to significantly improved underwriting results (+1205% YoY) and increased total other revenue (+27% YoY) despite sharply higher income tax expenses (+190% YoY). A 10% YoY growth in GWP amid a marginal increase in net claims (+2% YoY) drove underwriting results. The growth in total other revenue was largely attributable to the growth in interest & dividend income (+18% YoY). Growth in GWP (+13% YoY) during 1HCY19 supported mainly by the strong growth in the first quarter along with increased interest & dividend income was offset by higher net claims (+10% YoY) and the continuing trend of significant tax expenses (+151% YoY) resulting in a 5% YoY decline in earnings during first half of the year.
We project full year earnings of Rs. 660mn for CY19 (-9% YoY). We expect the slowdown in business for PLC along with reduced importation and purchase of passenger vehicles to affect earnings. At its current price of Rs. 20.50, PINS trades at a P/BV of 1.18x (based on NAVPS as at end June 2019) and CY19E P/E of 6.21x.
•JKSB is one of 15 founding members of the Colombo Stock Exchange with roots in share trading dating back to 1896, and is a subsidiary of John Keells Holdings PLC (JKH), the largest listed entity on the Colombo Stock Exchange with a market capitalization of US$ 1.3bn.
•JKSB’s core client base is Foreign Institutional Investors, Local Institutions and HNWI’s
•JKSB has a co-branded Research tie up with CIMB and a Research Referral agreement with Credit Suisse, along with trade execution relationships with several other global and regional securities firms.
•JKSB’s trade execution partners include Credit Suisse, CIMB, Merrill Lynch, Exotix, Daiwa, Convergex, Deutsche Asia Securities and Morgan Stanley
•JKSB is a research contributor to Bloomberg on ‘KEEL’
•The JKSB Research Universe covers 72 stocks across 15 sectors, with most Research efforts focused on approximately 45 of the more liquid counters.
•The JKSB Universe constitutes 67% of total market cap and approximately 80% of turnover at the CSE.
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