Hot Stock LPI rises 1.5% after 1Q results, upgrades

by **Cals** Thu 10 Apr 2014, 01:21

Hot Stock LPI rises 1.5% after 1Q results, upgrades

Business & Markets 2014

Written by Ho Wah Foon of theedgemalaysia.com

Wednesday, 09 April 2014 13:09

KUALA LUMPUR (Apr 9): LPI Capital Bhd rose in morning trades after it reported stronger first quarter results, which have invited some upgrades today.

The insurance company, controlled by prominent banker Tan Sri Teh Hong Piew, yesterday reported a 20% year-on-year increase in net profit of RM50.58 million for the first quarter ended March 31, 2014 (1QFY14). Revenue rose 7.5% to RM277.79 million.

Earnings per share (EPS) increased to 22.96 sen from 19.11 sen a year earlier.

At 12.30pm midday break, the stock rose 24 sen or 1.45% to RM16.84 on thin trades of 80,000 shares. It was the 7th top gainer.

In a brief note today, RHB Research Institute said LPI’s RM51 million 1QFY14 profit was in line and accounted for 23% of consensus estimates.

“Its subsidiary performed well despite a traditionally weak quarter, charting 12% premium growth.

“We adjust FY14F/15F EPS by 1%/4% on account of a lower commission ratio. We maintain our buy call with a higher FV of RM20.70,” said RHB analyst Kong Ho Meng.

Kenanga Research said due to a potential total return of 18%, including a 5% dividend yield, it was upgrading its call on LPI to “outperform” from “market perform”.

“We maintain our target price at RM18.75… We believe such valuation is not excessive as the stock has been trading at ~19x PER for the last 3 years.”

Kenanga is maintaining its FY14 and FY15 net earnings estimates of RM224.0 million and RM251.5 million respectively for the company.