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شركة قطر للتأمين
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Strong underwriting growth; attractive valuations...
• Qatar Insurance Company (QIC) is a pan GCC Property & Causality insurer with operating history of more than 45 years and underwriting footprints across the Middle East, Africa and Asia. It’s the highest rated insurer within the GCC with a rating of “A/ Stable” from Standard & Poor’s. QIC is headquartered in Qatar with branches in Dubai, Abu Dhabi, Saudi Arabia, Oman and Kuwait. It’s a dominant insurer in Qatar with a market share exceeding 50%.
• The stable rating has helped the company in raising the funds at a lower cost ranging between 3.4% to 5.75% having a maturity of less than a year. The company issued 32mn bonus shares which has diluted the equity by 75% in the first quarter of 2009, this has increased the borrowing headroom for the company. QIC has cash of QR2.5bn as at 9M09, and it contributes to 34.5% of total assets. The strong cash position of the company will help the company in capitalizing any opportunities in the insurance market. Since last five years it is a zero debt company. The company has operating cash flow of QR471.5mn and free cash flow of approximately of QR600mn (excluding dividend) in FY08. This indicates that the company has enough liquidity to cushion any risk and capitalize on income generating opportunities.
• QIC has highlighted its expertise in underwriting non-life risk, the improving retention rate is a positive indicator reflecting growth in net underwriting income. The retention rate has improved from 38% in FY06 to 49% in FY08, going ahead the strategy set by the management is to diversify from energy segment to property and casualty segment thereby resulting in lower reinsurance and improving the retention ratio. We expect the retention rate to be around 51-52% during FY09-12E. The retention ratio in the Motor, retail and corporate insurance segment is upto 100% except Medical segment having retention of 65%.
• We expect the investment income to grow from QR371.7mn in FY08 to QR573.7mn in FY12 and investment portfolio growing from QR2722.4mn in FY08 to QR4038.5 in FY12. The growth in investment portfolio will be driven by strong growth in GDP thereby creating investment opportunities.
• At the CMP of QR65.1 the stock trades at 8.8x and 1.8x FY09E P/E and P/BV and 7.5x and 1.7x FY10E P/E and P/BV. Using the Embedded Value Method and Price to book method we arrive at a price target of QR76.8 indicating a premium of 17.9% to the current market price. We recommend a “BUY” on the stock.
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أوربا |
أمريكا |
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جميع البيانات عند إقفال السوق |
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