Aksigorta A.S. (AKGRT TI) - Operationally strong results: Maintain Buy
Aksigorta announced 3Q19 net earnings of TRY91m (+1% q-q, +31% y-y, cumulative +57% y-y), which was in line with both our estimate (TRY90m) and the RT consensus (TRY88m). High technical profitability drove the strong 3Q results, especially supported by margin improvement at Motor Own Damage (MOD). Technical NIM reached 3.0% from 0.8% a year ago on eased combined ratio (95% vs 99% in 3Q18), thanks to the decline in claims. Premium retention remained high at 67%. Net investment income margin, on the other hand, declined to 10.8% from 13.7% a year ago on ebbed TRY deposit rates. Trailing ROAE rose to an eye-catching 46% from 33% a year ago.
We keep FY19-21E EPS unchanged. We maintain BUY.
Aksigorta is an international insurance group. Co.'s main operations include insurance activities based on non-life insurance branches, including primarily fire, marine, personal accident, engineering, agriculture and health. Co. focuses its business activities in Europe and Asia, which are grouped around four segments: Belgium, U.K., Continental Europe and Asia and served through a combination of wholly owned subsidiaries and partnerships with financial institutions and key distributors around the world. Co. operates in Turkey.
TEB Investment equity research analysts and strategist team consists of 8 analysts with an average finance sector experience of 15 years and special focus on international investors.
With our 6 equity research analysts we cover 93 companies across 21 sectors, reflecting 80% of the total market capitalization of all BIST companies and 86% of the BIST100 companies. Our strategy team provides in depth top-down and bottom-up market views with insight on FX and bond markets by publishing sectoral and strategic reports both in English and Turkish.
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