Analyst Pin-board PGI – High profit growth will not maintain in 2022
- 9M2021 gross written premium fell because of the pandemic. PBT surged 52% YoY owing to the sharper drop of health insurance sales, the product that has the highest expense ratio.
- 2021 combined ratio is expected to keep the improving trend of 1H, meaning the insurance business is more profitable. However, we do not expect that to maintain in the next year, as total sales will recover following the economic recovery and health insurance sales will rise on the low base of 2021.
- We forecast sales and PBT for 2021 to be VND 3,336 bn (USD 145 mn, -5.3% YoY) and VND 294 bn (USD 12.7 mn, +35.7% YoY). For 2022, sales and PBT will be VND 3,595 (USD 156 mn, +7.8% YoY) and VND 229 bn (USD 10 mn, -21.7% YoY). Equivalent EPS for 2021 and 2022 are VND 2,253/share and VND 1,781/share, respectively. P/B forward for 2021 and 2022 are 1.4x and 1.3x.
- We raise our target price of from VND 22,800/share to VND 27,000/share. This translates to a NEUTRAL recommendation based on the closing price of October 7, 2021 and a cash dividend of VND 500/share within the next 12 months. Market price may rise in the short-term when the positive result of Q3 is announced but the 2022 performance is not attractive for a higher valuation. Current PBR is 1.5x, higher than the average of 1.2x of the last three years.
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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