MNRB Holdings (MNRB) has reported a strong start to FY25, with 1QFY25 results surpassing expectations, driven by robust earnings growth in its reinsurance and general takaful divisions. Analysts have responded positively, maintaining a BUY rating and significantly increasing the target price.

The revised target price is now RM2.70, up from RM1.70, reflecting a 15% upside from the current share price of RM2.34. This adjustment is based on an upgraded valuation, pegging CY25E earnings to a long-term forward rolling price-to-earnings ratio (PER) of 5.5x, compared to the previous GGM methodology which used a PER mean of 6.1x. The substantial increase in earnings forecasts, by 92% for FY25E and 76% for FY26E, highlights the expected sustainability of MNRB's earnings momentum.

For 1QFY25, MNRB achieved a net profit of RM92.2 million, marking a 33% year-on-year increase and exceeding analyst expectations. This positive performance was mainly attributed to better-than-expected contributions from the reinsurance and general takaful segments. However, there was a slight offset due to a reduction in net profit from the family takaful business.

The reinsurance division saw flat revenue growth year-on-year but recorded a 44% increase in net profit, largely due to lower claims. Meanwhile, the general takaful segment experienced a significant 69% rise in net profit, driven by higher takaful revenue from motor and fire businesses. This was partially countered by a 5% year-on-year decline in net profit from the family takaful business, attributed to a decrease in its banca takaful operations.

The strong results in the first quarter have led analysts to adjust earnings forecasts upwards, reflecting confidence in the ongoing positive performance.