I have bought some TuneProtect shares earlier this year and always wanted to buy more but was holding back due to Q1 results not showing any indication it has put in place strategy to counter the opt in ruling for its travel insurance, worst, the high claim for motor insurance has caused a big fall in its profit.
Q2 results was just released last Friday (18 Aug) and the share price did not react much even though results was down >50% YOY.
| FY16 (RM'000) |
FY17
(RM'000)
|
||||||
Q1
|
Q2 | Q3 | Q4 |
Q1
|
Q2
|
||
| Revenue | Investment Holding | 5 | 8 | 13 | 9 |
836
|
621
|
| Collective Investment Scheme | 4,969 | 4,841 | 4,662 | 4,891 | 2,542 | 1,561 | |
| General ReInsurance -Rev | 17,291 | 15,760 | 16,362 | 15,539 | 13,843 | 16,143 | |
| General Insurance -Rev | 107,279 | 104,926 |
105,039
|
115,027
|
112,860 | 115,553 | |
| Total -Rev | 129,544 | 125,535 |
126,076
|
135,466 |
130,081
|
133,878 | |
| PBT | Investment Holding | 18,853 | 15,106 | (4,908) | (3,841) | 40,501 | 4,655 |
| Collective Investment Scheme | 4,763 | 4,509 | 4,498 |
3,571
|
2,474 | 1,423 | |
| General ReInsurance -PBT | 16,582 | 14,482 | 13,914 |
14,856
|
11,494 | 13,250 | |
General Insurance -PBT
|
11,547 | 24,298 |
7,445
|
4,992 |
9,436
|
1,987 | |
| Total | 51,745 | 58,395 | 20,949 | 19,578 | 63,905 |
21,315
|
|
Adjustment
|
(25,748) |
(23,222)
|
(4,248) |
(2,766)
|
(48,841)
|
(8,212)
|
|
| Consolidated PBT |
25,997
|
35,173 | 16,701 | 16,812 | 15,064 | 13,103 | |
PBT margin
|
General ReInsurance
|
95.9% |
91.9%
|
85.0%
|
95.6% | 83.0% | 82.1% |
General Insurance
|
10.8% | 23.2% |
7.1%
|
4.3% | 8.4% | 1.7% | |
|
|||||||||||||||||||||||||
We can see that Q2 FY17 revenue has improved from Q1 but PBT was clearly disappointing. The results from Q2 clearly confirmed the reason given by the company that its claims on general insurance was high, I believe mostly from motor insurance. The recent appointment of CEO and actuary - one to address the sales & marketing and another to improve its actuarial development further stressed the seriousness of the matter.
What surprised me was that the share price did not react badly yesterday after the results was announced last Friday. I recalled a friend asked me what was my target entry price about 2 weeks ago when it was at around Rm1.03. I replied the price was already attractive but I wanted to wait for Q2 results as it was expected to be bad, also hoping to buy some at even more attractive price. When I noted it did not really fall yesterday, I bought some at Rm1.00 and when the buying momentum built up, I bought some at Rm1.05 today. It is really unexpected as after bad Q1 results, the price dropped from May to Aug and now, Q2 results are not that encouraging except revenue is improving but profit still dropped due to high claims. Expectation already well built in its price earlier..the only explanation. May add a little more when the price stabilise later as today is clearly very "hot". As I said before, I like TuneProtect for its scalability and asset light model. As it is on top of my shopping list, I wanted to wait further and hope to buy at lower price but at the same time worry that it will take off earlier than I thought. I hope I am not in too early ..of course I do not want to miss the flight either! Howard Marks once said " Risks of investment - not just risk of losing money but also risk of missing opportunity!".
