Investment Recommendation

PVI_BUY_TP 59,300_Strong position in Non-life Insurance_BSC Company Update

Date

12/04/2022
Security code

PVI
Company

PVI
Language

Tiếng Anh
Number of Downloads

389

Detailed report

Valuation

BSC recommends BUY PVI shares with the recommended price of 59,300 VND/share (equivalent to 20.5% upside compared to the closing price on January 28, 2022 at 49,200 VND/share) with a target PB = 1.6x .

Forecasting business results

BSC forecasts PVI's revenue and net profit in 2022 to reach VND 4,511 billion (+11.8% yoy) and VND 951 billion (+8.1% yoy), EPS FW = 3,824 VND/share assuming (1) Insurance premium revenue original insurance growth 10.1% yoy ; (2) The combined ratio increased to 95.3%, of which the loss ratio increased to 32.1% ; and (3) The gross and net return on investment of investment assets are 8.4% and 7.5%, respectively. (increase by 0.1 percentage point and 0.4 point % respectively) .

Investment perspective

PVI's non-life insurance premium is expected to grow by 10.1% in 2022 ;
PVI maintains a stable market share of over 15%, with a nationwide network of branches and a large customer base of the PVN system ;
Financial profit improved thanks to increased proportion of bond investment.

Catalyst

PVIRe raises capital to help raise retention rate & credit rating
The divestment from PVN may help PVI be valued at a higher price in the near future .

Risks

The prolonged epidemic affects the growth of insurance premium revenue.
Lower interest rates reduce PVI's financial profit.

Business Update

In 2021, PVI's revenue and NPAT will reach VND3,606 billion (-4.9% yoy) and VND245 billion (+26% yoy) respectively due to (1) insurance business expenses down 1.2% yoy, (2) expenses claims and reserves decreased 6.7% yoy, and (3) finance revenue increased 7.3% yoy .