Takaful Malaysia on the uptrend after hitting a low in March

Syarikat Takaful Malaysia Keluarga Bhd (Takaful) has been moving higher after plunging to 52-week low of RM3.48 in March. The company is currently trading at a PE ratio of 9.3x and price over net asset value (P/NAV) ratio of 1.8x is higher which is higher than most peers.

Takaful posted marginally higher net profit for the second quarter ended June 30, 2024 (2QFY2024) of RM93.10 million, versus RM91.88 million a year ago. This was on the back of higher revenue of RM862.47 million from RM717.24 million in 2QFY2023.

The company said better revenue was mainly due to higher contribution release of RM75.9 million and higher amount charged for takaful coverage of RM60.1 million. For the first half of the year (1HFY2024), Takaful's net profit grew 5.3% to RM195.40 million from RM185.50 million a year earlier. Total takaful revenue in the 6 months just ended rose 23.4% to RM1.69 billion from RM1.37 billion a year ago.

Going forward, Takaful Malaysia said it will continue to focus on the group's core businesses in bancatakaful, treasury, employee benefits and general takaful. The group also pointed to its flagship digital platform, Kaotim, which it said has achieved positive results since its launch in late 2023.

In this segment, its focus remains with young professionals and the digitally savvy, a market segment. It believes that these customers will mature into a key customer segment with growing protection needs in future.

Despite facing global challenges such as inflationary pressures, relatively higher interest rates, and weak consumer sentiment, Takaful believes there are significant opportunities in the takaful market.

Investors should be positive on the company which has strong capital and liquidity buffers position, giving it good opportunity to grow further.