JKSB: Quarterly Highlights: Ceylinco Insurance PLC (CINS): 1QCY19
CINS reported a 44% YoY decline in quarterly earnings for 1QCY19 mainly due to significantly larger transfers to the Life Fund during the quarter, a 14% YoY increase in insurance claims and benefits (continuing the trend of increased payments for life insurance contract maturities and surrenders seen in CY18) and a steep increase in income tax expenses. Earnings for the quarter shrunk in the LI and GI segments by 52% and 36% YoY, respectively. The education segment reported a contraction in earnings for the quarter (-37% YoY). Most segments reported a decline in profitability for 1QCY19, amid the power generation and other operations segments reporting improved earnings of 289% and 141% YoY, respectively.
We project full year earnings of Rs.8.6bn for CY19 (+2% YoY). Our earnings projection indicates a marginal growth in earnings to reflect the medium-term effect the Easter Sunday attacks, increased vehicle prices and political uncertainty will have on life and non-life business during the year. At its current prices, the voting and non-voting shares trade at P/BVs of 1.05x and 0.42x respectively (based on NAV as at end March 2019), at a discount to the JKSB insurance coverage universe.
•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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