ALLIANZ–Fundamental Analysis (29 May 2014)

ALLIANZ Analysis:-

Excel – http://1drv.ms/1nwa0j0

My View:-

– Fair Value/Market Timing
  – 5Y DCF: 25.85 – 29.53 (MOS: 60% – 65%)
  – Absolute EY%: Buy under 9.12, sell above 11.10 (MOS: 6.32%)
  – ALLIANZ is undervalued in long term.
– I think MH370 incident will only give negative impact to ALLIANZ in short term. So far, ALLIANZ only identified 5 of the passengers are their client.
  – For some people, this is a risk, but I view this as an good opportunity.
– ALLIANZ’s dividend payout is extremely low, so never expect good dividend from them. Reasons:
  – High capital or surplus retained due to nature of industry
  – Stringent regulatory requirement to protect policyholders’ interest
  – Managing stringent capital buffer to withstand adverse or unfavorable experience
– Unlike LPI (general insurance and financing on leases), ALLIANZ is heavily dependence on single segment: motor insurance; and also dependence on agent for life insurance. ALLIANZ requires high capital to grow distribution capabilities, and fund new business growth.
– Balance float of outstanding shares is very low: 4.20%.
– My wife and I are considering to buy ALLIANZ with our joint account, while my wife already owned shares of LPI.
– References:
  – https://www.allianz.com.my/web/lna/10074/10064/2014#
  – http://klse.i3investor.com/blogs/rhb/47700.jsp
– I will continue accumulate ALLIANZ along the way.

Latest Financial – Q1 2014 Financial Report (28 May 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1637065

At the time of writing, I owned shares of ALLIANZ.

Advertisements

2 thoughts on “ALLIANZ–Fundamental Analysis (29 May 2014)

  1. Hi LC,
    Under what circumstance, we should use absolute EY% and 5Y DCF for reference price as point of buying or selling? Please advise.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s