Malaysian National Reinsurance Berhad, the country's national reinsurer was set up in 1972 to limit the outflow of reinsurance premiums overseas. The company commenced operations on 9 February 1973.
In 2005, as a result of a restructuring exercise within the MNRB Group, the company's reinsurance license, business and assets were transferred to its subsidiary company, Malaysian Reinsurance Berhad. Pursuant to the restructuring, Malaysian National Reinsurance Berhad became an investment holding company and changed its name to MNRB Holdings Berhad (MNRB). Today, MNRB is listed on the Malaysian Bourse (Bursa Malaysia). Its market capitalisation stood at RM1.02 billion as at 23 July 2014.
The MNRB Group comprises leading wholesale providers of reinsurance and retakaful as well as a takaful operator. Its reinsurance subsidiary stands tall among the top reinsurers in the region, writing lines of general businesses locally and abroad. In Malaysia, its takaful operator vies among the leaders in the provision of Islamic financial protection services based on the takaful system.
10 reasons why I like this company
1. Big Turnaround
From a loss of RM20.1 million in the previous quarter to a net gain of RM76.9 million in the quarter ended 31.3.15 is an achievement. The momentum in earnings is likely to extend into the next quarter.
2. High NTA of RM6.32 as at March 31, 2015
Compared to its market price of below RM4, the NTA is a safety net.
3. Group Profit of RM127 million is commendable
Despite hefty provisions for claims relating to the MH17 tragedy and the disastrous floods in Kelantan, Terengganu & Pahang, the company is able to made 59.9 sen per share for the year ended 31.3.15.
4. Low Price to Earnings
Based on EPS of 59.9 sen and the price of 3.90, the PE is at 6.51. This is undemanding for such a good stock.
5. It wholly-owned subsidiary, Malaysian Re (Dubai) Ltd (MRDL) which contributed much to the bottom line is rated ‘A’ by A.M.Best Co and Flitch Ratings.
6. Appointment of new CEO
A proven leader, (accordingly to the Chairman of MNRB) Zainnudin Ishak has been appointed as the new CEO on April 01, 2015. Being new, he is sure to be going all out to prove himself as a capable leader. He is likely to bring the group to a new level of growth.
7. The company has a dividend policy of paying 40% of earnings as dividends.
8. Next quarter earnings are likely to be good as the group has done well in the past for quarters ending in June.
9. Recently, Malaysian Re has been granted approval by BNM to conduct General and Family retakaful business. This is likely to bring in more profits.
10. With a new and proven CEO at its helm, I believe that the company will be lifted to a new level of growth. Hence a much higher market valuation by yearend is expected.
Buy at your own risk.