Analyst Pin-board PGI – High profit growth will not be maintained in 2022
- 2021 gross written premium fell because of the pandemic. PAT surged 100% YoY to VND 352 bn (USD 15.3 mn) owing to low compensation payment and a sharp drop of health insurance sales, the product that has the highest expense ratio. Combined ratio declined, meaning the insurance business is more profitable than last year. However, we do not expect that to maintain in 2022, as total sales will recover following the economic recovery and health insurance sales will rise on the low base of 2021.
- For 2022, gross written premiums and PAT are forecasted to be VND 3,767 (USD 164 mn, +12.6% YoY) and VND 251 bn (USD 11 mn, -28% YoY) on the basis of higher combined ratio and the slight picking up of deposit rate. Equivalent EPS and book value per share for 2022 are VND 2,800/share and VND 22,400/share.
- For 2023, we see more growth opportunities for PAT given the recovery of deposit rate and the compensation to be normalized. Thereby, we expect a growth of 19% in PAT, higher than the growth of 11.7% in gross written premium. Equivalent EPS and book value per share for 2023 are VND 3,611/share and VND 24,500/share.
- Forward PBRs for 2022 and 2023 are 1.4x and 1.2x, approximate the average PBR of 1.3x of the last three years. We maintain our target price of VND 31,000/share. This translates to a NEUTRAL recommendation based on the closing price of February 21, 2022 and an expected cash dividend of VND 500/share within the next 12 months. Market price has risen in the short-term since the positive results of Q3 and Q4 were announced but the 2022 performance is not attractive for a higher valuation.
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.
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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