Tune Ins

Tune Ins was my favourite counter last year as it had solid fundamentals and its price range was easy to predict. It peaked to nearly RM 2.50 this year before dropping below RM 2 this week. Here are my findings from the 2013 annual report.

Income related: 

- Revenue growth of 30.85% (geometric growth).
- Net claims increased by 116%.
- Net claims rate per revenue of 24.2% in 2013 as opposed to 19.18% in 2012.
- Fees and commission expenses nearly doubled.
- Finance costs dropped to just 20% of the cost in 2012.
- Management expenses nearly doubled.
- EPS of 9.29 cents in 2013 versus 16.25 cents in 2012.

Cash flow related:

- Net cash from operating activities dropped by RM 30 million in 2013.
- Investing activities only used RM 2.7 million in 2013 compared to RM 79.2 million in 2012.
- Financing activities show a positive inflow of cash due to the issue of new shares.

Notes to the financial statements:

- In Note 17, the company was given a loan of RM 160 million. The weighted average effective interest rate at 6.25% is way higher than a standard bank loan.


Valuations 

1. Book value plus model would put it at RM 0.52 per share.
2. EVA gives a meager RM 0.07 per share.

Intrinsically this counter is not at a discount. The fundamentals may be solid, but its charm has slightly eroded compared to its performance last year.