Report

PGI - Impacts of COVID-19 becomes evident in 2Q

COVID-19 creates systemic risks that prevents insurers from adapting through risk diversification. Therefore, the insurance business will inevitably face obstacles. However, the impact on revenue may occur only in the short term until the pandemic is contained, particularly by the end of 2Q2020, according to our expectation. In the long term, PGI's business performance will still be positive due to many factors including Good B+ credit rating, the ability to reduce costs thanks to the application of information technology and the support from major shareholders in expanding its high quality customer base. A prudent investment portfolio with 90% in  bank deposits is also a plus to ensure stable profit growth.

Using methods of EVA, P/E and P/B, we revise down PGI's target price by 8% to VND 17,500/share compared to the latest valuation in the 2020 Strategic Report. With an expected cash dividend within the next 12 months of VND 1,300/share, we have an ACCUMULATE  with a total return of 18% based on the closing price of May 20th, 2020.

Underlying
PJICO Insurance

Petrolimex Insurance Corporation, formerly PJICO Insurance Corporation, is a Vietnam-based insurance carrier engaged in the property and casualty segment. It provides insurance underwriting services for vehicles, properties, fidelity, fire, marine, title, auto, professional liability, bonding, funeral and other surety policies. In addition, it offers reinsurance services, as well as life and health insurance services.

Provider
Viet Dragon Securities
Viet Dragon Securities

Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.

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Analysts
Tam Pham

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