PSG Konsult | Let down by their investment style
We expect PSG Konsult (KST) to report 5% H1 '19 HEPS growth relative to the 14% CAGR achieved over the past four years. KST's asset management division will probably report a decline in earnings due to benchmark underperformance and lower AUM levels. Despite short-term headwinds, we are positive on KST's long-term growth prospects. We expect KST to gain wealth market share as its franchise model attracts top advisers and generates positive net flows. We expect strong growth (17% CAGR in earnings to FY ‘22f) from the insurance operations that are still sub-scale. KST's share price has declined by 26% YTD resulting in a derating from 20x PE to 15.5x. We therefore believe KST's valuation presents an attractive entry point given the long-term growth potential.PSG Konsult Limited is an independent financial services company. The Company offers clients access to a range of financial products to meet their financial planning needs, ranging from investments to insurance and wealth management services in-between. The Company operates through three segments: PSG Wealth, PSG Asset Management and PSG Insure. The PSG Wealth segment offers a range of personalized services, including portfolio management, stockbroking, local and offshore investments, estate planning, financial planning, local and offshore fiduciary services, multi-managed solutions and retirement products. The PSG Asset Management segment offers a range of local and global investment products, including both local and international unit trust funds. The PSG Insure segment offers a range of short-term insurance products and services from personal (home, car and household insurance) to commercial (business and agri-insurance) requirements.
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