Excel – http://1drv.ms/1NsRJz5
- Absolute EY%:
- FY14 (EPS: 0.716) – 10.998 (Uncertainty Risk: HIGH)
- R4Q (EPS: 0.748) – 11.489 (Uncertainty Risk: MEDIUM)
- FY15 (EPS: 0.98 ± 5%) – From 14.303 to 15.809 (Uncertainty Risk: LOW)
- FY16 (EPS: 1.08 ± 5%) – From 15.763 to 17.422 (Uncertainty Risk: LOW)
- EPS applied to reach the current stock price (10.6): 0.690
- 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 – Q2 2015 Financial Report (26 Aug 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/4846265
At the time of writing, I owned shares of ALLIANZ.