Friday, July 8, 2022

Syarikat Takaful Malaysia Keluarga Berhad (6139) based on information on AR/37th AGM

 



 

Business activities: insurance

 

Products: divided into 2 groups

Family takaful insurance

General Takaful insurance

Employee benefits

Takaful myMotor

Takaful mySME partner

Takaful myFire

Group Credit Family Takaful

Takaful myHouseowners and householders

Takaful myMortgage

Takaful myHome content

Takaful myTerm

Takaful myPA care

Takaful myCI Cover

Takaful mySME

 

Boilers and pressure vessel

 

Contractor’s all risks

 

Machinery breakdown

 

Foreign workers takaful quarantee

 

Foreign workers hospitalisation and surgical scheme

 

Employee’s liability

 

Public liability

 

Workmen’s compensation

 

Marine cargo

 

All risks

 

Burglary

 

Fidelity guarantee

 

Group personal accident

 

Money

 

Takaful myTravel PA

 

Takaful myTravel Umr

 

Core business foundation:

1. Bancatakaful

2. Public sector home financing board (LPPSA)

3.  Employee benefit segment

 

Bancatakaful partner:

1. RHB islamic (for general and family takaful-2020-2025)

https://www.theedgemarkets.com/article/syarikat-takaful-inks-two-bancatakaful-deals-rhb-islamic

2. Bank Islam

3. Bank Rakyat

4. Bank Affin

 

Family takaful/general takaful market share for STKM:

Year

2018

2019

2020

2021

2022

Family takaful

28%

30%

23%

20%

-

General takaful

25%

22%

24%

24%

-

 

Stock information:

Number of share :827.31 mil

Share price : RM 3.15

Market capital : 2637 mil

 

Revenue and PAT (million)

 

2018

2019

2020

2021

2022 (YTD)

Revenue

2639

3125

2957

3179

997.4

PBT

337

418

427

439

122

PAT

295

365

362

411

87

 

 

Family/general takaful Performance (million)

Family takaful

2018

2019

2020

2021

2022 (YTD)

GEC

1608.5

2042.3

1756.9

1887

531.4

Net benefit/claims

-803.1

-801.6

-751.9

-752

-295.6

Investment income

251.5

277.9

286

288.5

73.5

Fair value

-71.0

30.3

17.2

17.8

-35.5

General takaful

2018

2019

2020

2021

2022

GEC

685.8

706.2

756.5

878.7

252.5

Net benefit/claims

-204.7

-202.2

-153.2

-212.7

-57.2

Investment income

28.7

31.2

30.7

29.6

7.9

Fair value

-2.8

0.7

-0.1

0.1

-

 

Revenue and profit/loss from Indonesia

 

2018

2019

2020

2021

2022 (YTD)

Revenue

133.9

141.0

125.0

124.6

39.4

Profit/loss before tax

-5.1

0.6

4.7

3.5

-0.8

*challenging landscape in Indonesia based on CEO.

 

Latest information by CEO on MFRS 4 and MFRS 17 in AGM

-under MFRS4, profit can be recognised upfront

-under MFRS 17, it is required to

a) defer profit and gradually release the unearned profit over lifetime of contract

b) Capitalise unearned profit (contractual service margin will be classified as liability in balance sheet)

- expected to decrease retained earning by 30-45%

-expected profit  to decline by 15-20%. (*profit expected to be normalised within 5-6 years

 

If we calculate, (taking into consideration of worst case scenario on latest equity and trailing EPS)

NTA:2.25  x 0.55 (reduction of retained earning by 45%)= 1.23

EPS: 46sen x 0.8 (reduction of profit by 20%)= 36.8 sen

And  it takes 5-6 years to grow the profit back to 46 sen.

https://www.takaful-malaysia.com.my/footer/MinutesAGM/37th_AGM_Minutes.pdf

(a lot of useful information is written in AGM. Pls read through if you are considering investing in STKM)

 

Dividen:

24% as for 2021, no fixed dividen distribution policy

 

Risks to business

1. Increasing competition with market share (family takaful) for STKM is reducing from 30% (2019) to 20% (2021)

https://www.theedgemarkets.com/article/syarikat-takaful-down-34-after-launch-fwd-takaful

2. Possible more flood due to global warming

https://api.nst.com.my/opinion/columnists/2021/10/734295/expect-more-flooding-malaysia-because-global-warming

3. Economy downturn (less people purchases houses/cars/insurance)

 

Strength/good

1. Penetration rate for takaful is still low (18.6%) and still space to grow

https://www.bernama.com/en/business/news.php?id=2075657

 

Market share

Market share for family takaful

2018

2019

2020

2021

2022

STKM

28

30

23

20

 

ETIQA

20.97

 

 

 

 

PRU BSN

11.37

 

 

 

 

AIA

9.19

 

 

 

 

SUN LIFE

8.08

 

 

 

 

TAKAFUL IKHLAS

8.03

 

 

 

 

GREAT EASTERN

5.43

 

 

 

 

OTHERS

9.52

 

 

 

 


Market share for general takaful

2018

2019

2020

2021

2022

STKM

25

22

24

24

 

ETIQA

46.27

 

 

 

 

ZURICH

15.59

 

 

 

 

TAKAFUL IKHLAS

9.84

 

 

 

 

HL-MSIG

1.8

 

 

 

 

OTHERS

1

 

 

 

 

 

* I don’t have the information on market share except 2018.

 

Some information on  FWD takaful - one of the family takaful operator launched 2019 (by Robert Kuok-controlled JAB Capital Bhd, the Employees Provident Fund (EPF) and Hong Kong business magnate Li Ka-shing's son Richard Li)

 

Family takaful (FWD takaful)

RM million

2018

2019

2020

2021

2022

GEC

161.2

140.5

260.0

445.7

 

GEC triple from year 2019 to 2021.

Financial statement (FWD takaful)

Year 2019

https://web.fwd.com.my/-/media/images/documents/reports/yearly-financial-statements/financial-statement-2019.pdf?rev=981ca6ec0c964906ac6e1b74b4ecd773

 

Year 2020

https://web.fwd.com.my/-/media/images/documents/reports/yearly-financial-statements/financial-statement-2020.pdf?rev=6ec6386305104ebeb09718c13e3e3dd5

 

Year 2021

https://web.fwd.com.my/-/media/images/documents/fwdtfssigned.pdf?rev=0ee44b11b06a4305acbbcf48c70ad799

 

 

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