Wednesday, January 12, 2011

LPI Capital up on dividend, earnings

KUALA LUMPUR: Shares of LPI CAPITAL BHD [] rose to more than RM14 in early trade on Wednesday, Jan 12 after the company declaration of 45 sen dividend a share.

However, OSK Research downgraded LPI to Take Profit, with a revised target price RM12.30, as the stock's FY11 PER of 19.5x looks expensive.

At 9.15am, LPI was up 18 sen to RM14.08 with 10,900 shares done.

The FBM KLCI rose 4.7 points to 1,567.64. Turnover was 240.32 million shares done valued at RM147.24 million. There were 292 gainers, 59 losers and 137 stocks unchanged.

LPI Capital posted net profit of RM36.94 million in the fourth quarter ended Dec 31, 2010, up 5.6% from the RM34.97 million a year ago, boosted by higher gross premium underwritten.

Revenue rose 6.6% to RM190.74 million from RM178.88 million while net assets per share were RM5.26 versus RM6.54.

It also declared a second single tier interim dividend of 45 sen per share which will go ex on Jan 24 and entitlement date is Jan 26.

However, OSK Research said LPI Capital's earnings were largely in line with consensus and its full-year estimates.

It said revenue and net profit ticked up by 7.7% and 9.4% y-o-y, mainly attributed to the strong growth in underwriting surplus (+19.6%) backed by higher gross premiums (+11.9%) and lower management expenses (-25.5%).'' The claims ratio rose marginally to 47.5% vs 46.7% in FY09.


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