Great Eastern

[winston]

not vested

Over the last couple of months, the world’s largest insurers have been fighting for a slice of the insurance pie in Asia, triggering a flurry of M&A deals.

Last October, Pacific Century Group bought over ING Groep NV’s insurance business in Hong Kong, Macau and Thai life insurance units for
US$2.14bn. The deal was followed closely by AIA’s purchase of ING Malaysia’s life insurance operations for US$1.73bn, while Prudential Plc bought Thai Thanachart Life Assurance Co, the 10th largest life insurer in Thailand, for US$590m in cash.

In the latest deal sealed last week, Canada’s Sun Life Financial and Khazanah Nasional bought the Malaysian joint-venture insurance business of Aviva-CIMB for US$596m at a pricey multiple of 2.9x book value.

Global players are attracted to the allure of the Southeast Asia market, a region with high economic growth, a 600 million population base and relatively low levels of market penetration.

Transaction multiples in the recent spate of M&A deals, at 1.9-4.7x book values, suggest the stark under-valuation of Great Eastern Holdings, which trades at 1.7x book value and below Embedded Value of $17.30/share. Great Eastern today holds market-leadership positions in Singapore and Malaysia, and also operates in high growth markets such as Indonesia and Vietnam.

Price drivers include:
1) Dividend hike arising from the huge gain from the sale of F&N/APB shares;
2) Steady underwriting results underpinned by growth in regular premium plans;
3) clearing of over-hang of selling by institutional funds;
4) a third privatization attempt by parent OCBC.

We pegged our valuation at a multiple of 1.55x P/EV for its core insurance operations and add back estimated excess capital of $4.35, deriving a TP of $24.50. GEH’s FY12 results will be released on the 8th February.

We maintain our BUY recommendation.

Source: DMG

[winston]

Dividend

The Board of Directors is pleased to recommend a final tax exempt (one-tier) dividend of 27 cents (2011: final tax exempt (one-tier) dividend of 27 cents per ordinary share) and a special tax exempt (one-tier) dividend of 27 cents (2011: nil). Including the interim tax
exempt (one-tier) dividend of 10 cents paid in September 2012, total dividends for financial year 2012 would amount to 64 cents per ordinary share (2011: 37 cents per ordinary share).

The recommended final and special dividends will be payable on 9 May 2013 subject to shareholders’ approval at the Annual General Meeting.

The Share Transfer Books and Register of Members of the Company be closed on 26 April 2013.

http://info.sgx.com/webcoranncatth.nsf/ ... penelement

[winston]

not vested

Singapore insurer Great Eastern Holdings said fourth-quarter net profit tripled to S$225.6 million ($182 million) from S$68.9 million a year earlier, on trading gains and a better investment performance due to market recovery.

Source: Reuters

[winston]

not vested

Time: 4:17PM
Exchange: SGX
Stock: GreatEast(G07)
Signal: Support - Broken with High Volume
Last Done: $17.27


Source: UOBKH

[winston]

Great Eastern Holdings (GE) posted 2Q13 net profits of S$18.6 million, down 77% y-o-y, compared to S$81.4 million in 2Q12.

The decline in profits was mainly attributable to significant unrealized mark-to-market losses, as financial markets reacted to the prospects of the U.S Federal Reserve pulling back its bond purchase program.

Nevertheless, operating profit from insurance business rose 32% y-o-y to S$154.5 million in 2Q13, buoyed by increased contribution from both Participating and Non-participating Funds.

The Group also declared an interim dividend of 10 cents per share, in line with last financial year’s payout.

Consensus forecasted FY13 dividend yield stands at approximately 3.0%.

GE’s earnings results are likely to have negative impact on OCBC’s share price (where GE contributed approximately 23% of OCBC’s full year operating profits in FY12).

As flagged out in our initiation report on OCBC (dated 4 July 2013), MTM investments losses was one of the prospective risks for OCBC. We maintain a HOLD recommendation on OCBC.


Source: Lim & Tan

[winston]

not vested

Great Eastern Q3 gain down by half

Great Eastern Holdings has reported growth in its core insurance business although the absence of year- ago one-time gains dragged its third-quarter bottom- line net profit down by 54 per cent.

Looking ahead, the insurer said that it was too early to forecast the impact of new financial advisory rules that come into effect in 2014, and that global economic conditions will remain uncertain for a while.

Great Eastern posted lower year-on-year third- quarter net profit attributable to shareholders of $282.8 million, or 60 cents per share, for the three months ended September. But excluding a $421.6 million boost to the year-ago numbers from Great Eastern's sale of its interests in Fraser and Neave (F&N) and Asia Pacific Breweries (APB), Great Eastern would have seen a 43 per cent increase in net profit.

For the nine months to September, net profit was down 47 per cent at $508.9 million. Excluding the one-off gains, however, nine-month profit would have slipped just 6 per cent.

Great Eastern's bottom line can be a misleading indicator of the underlying performance of its core business because the company has to mark its investments to market, even though a significant portion of those investments are typically fixed-income instruments that are redeemed in full at maturity.

Just looking at its insurance business, Great Eastern's core operating profit rose 26 per cent to $138.6 million in Q3.

Moving forward, Great Eastern has rebalanced its portfolios to take into account continued volatility in the markets, with a base case expectation that the United States will not raise short-term interest rates in 2014


Source: AmFraser

[winston]

not vested

Great Eastern’s Q4 profit falls 26%

SINGAPORE — Insurer Great Eastern Holdings said yesterday net profit for the fourth quarter plunged 26 per cent to S$165.9 million, because of exceptional items and revaluation losses.

Income from its insurance business decreased 23 per cent to S$172.1 million, partly because of the combined effect of two one-off items: Namely, a release of tax provisions that benefitted the Singapore non-participating fund and a negative impact from a change in the timing of terminal bonus recognition for the Malaysia participating fund.

Total weighted new sales rose 19 per cent to S$306.5 million, with growth across all channels in Singapore, a pick-up in sales of savings and retirement products in Malaysia, as well as continuing growth in takaful (a type of insurance system devised to comply with Shariah laws) sales. In Singapore, total weighted new sales rose 22 per cent to S$182.9 million.

For the full year, net profit fell 43 per cent to S$674.8 million, resulting from the absence of a previously enjoyed one-off gain from the sale of the group’s shareholdings in Asia Pacific Breweries, and conglomerate Fraser and Neave in the third quarter of 2012. Excluding this one-off gain, net profit would have fallen 12 per cent instead.

The insurer’s board proposed a final dividend of 40 cents a share and a special dividend of 5 cents a share.

http://www.todayonline.com/business/grea...t-falls-26

[winston]

not vested

Great Eastern Holding’s 4Q13 earnings were softer q-o-q but within expecatations.

Underlying business remained strong. GEH declared 40 Scts final DPS plus 5 Scts special DPS, bringing full year DPS of 55 Scts.

OCBC will release 4Q13 results on 14 Feb. Insurance income should be inline.

We expect stronger non-interest income q-o-q.


Source: DBS

[winston]

not vested

Great Eastern (GE) reported 1Q14 net profit of SGD232m (+12% yoy) on broad-based growth across its distribution channels in Singapore and Malaysia.

During the quarter, the group wrote SGD226m in weighted new sales, generating new business embedded value of SGD89.2m. Operating profit from its insurance business was 9% higher at SGD143.3m, offset partially by lower investment profit of SGD 33.4m (-13% yoy) due to lower mark-to-market gains on the investment portfolio.

The good 1Q14 performance follows on from a 12% growth in operating profit to SGD560m in 2013, and we expect GE’s operating profit to grow 10-12% in FY14E, underpinned by the strength of the group’s multi-channel distribution strategy in Singapore and stable sales of both conventional and takaful insurance products in Malaysia,.

Despite a spate of M&As in Malaysia last year, including AIA’s acquisition of ING-Malaysia’s life insurance operation, GE continues to maintain its dominant position in Singapore and Malaysia through product innovation and a well-diversified distribution network.

We continue to like GE for its dominant insurance franchise in Singapore and Malaysia and the stock is inexpensive trading at 0.96x P/Embedded Value against multiples of 1.5-2.5x for its regional peers. Since last year, GE has began to separate out investment income from its more stable under-writing business, and with this, investors are now able to peg an appropriate multiple for the long-tailed life insurance business.

We believe this has led to the recent strength in the share price. GE remains a BUY in our view and our TP of SGD25.30 is pegged to 1.3x P/EV. (

Source: OCBC

[winston]

not vested

Great Eastern ($23.75, up $0.05) announced 3Q14 total weighted new sales (a formula used to combine single and regular insurance premiums) decreased 22% to S$213.9mln while new business embedded value, a measure of the long term profi tability of new sales, also dropped 14% to S$94.3mln.

Additionally, net profit dropped 31% to S$194.6mln due to lower unrealised mark-to-market gains although operating profi t from the insurance business was a bright spot as it increased 8% to S$149mln.

As with 3Q13, no interim dividends were declared.

Going forward, the company will continue to deliver growth in operating profi t while margins have also improved. However, it also warned that upcoming regulatory developments and increased competition remain a challenge.

At $23.75, market cap is S$11.24bln, trailing P/E is 13.4x, P/B is 4.6x and dividend yield is 2.3%.

Source: Lim & Tan