ALLIANZ – Fundamental Analysis (9 Jun 2015)

ALLIANZ Analysis:-

Excel –

Notes –

My View:-

  • Valuation:
    • Absolute EY%:
      • Fair Value: 12.7 – 14.1
      • Uncertainty of Fair Value: MEDIUM to HIGH
    • Absolute P/TB
      • Fair Value: 13.26 – 15.2
      • Uncertainty of Fair Value: MEDIUM
  • 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. By the way, my wife owned shares of LPI.
  • Balance float of outstanding shares is very low: 4.20%.
  • As Life Insurance is maturing into an exponential phase of contribution, I believe ALLIANZ growth is quite secure. Besides, recurring premium is now 80% of LI’s portfolio and new business margins will be anchored by bancassurance (past the initial phases of expense overrun) and ILB (better margins vs traditional).
  • Valuation of ALLIANZ is not bad. I will continue to hold ALLIANZ, and accumulate ALLIANZ whenever possible.

Latest Financial – Q1 2015 Financial Report (27 May 2015)

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


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