Syarikat Takaful Malaysia Keluarga Financial Report
SYARIKAT TAKAFUL MALAYSIA KELUARGA
(STMB MK EQUITY, TAKA.KL)
22 Aug 2025
Stronger insurance service results supported by favorable claims experience
BUY (Maintained)
Kelvin Ong, CFA
kelvin-ong@ambankgroup.com
03-2036 2294
Rationale for report: Company results
Key Data
| Price | RM3.17 |
|---|---|
| Fair Value | RM3.80 |
| 52-week High/Low | RM4.16/RM3.13 |
Key Changes
| Fair value | 0 |
|---|---|
| EPS | 0 |
Financial Summary
| YE to Dec | FY24 | FY25F | FY26F | FY27F |
|---|---|---|---|---|
| Takaful Revenue (RMmil) | 3,576 | 3,159 | 3,356 | 3,553 |
| Core net profit (RMmil) | 378 | 352 | 366 | 387 |
| FD Core EPS (Sen) | 45 | 40 | 42 | 44 |
| FD Core EPS growth (%) | 9.0 | -10.6 | 4.0 | 5.5 |
| Consensus net profit (RMmil) | 401 | 418 | 449 | |
| DPS (Sen) | 17 | 14 | 15 | 16 |
| BV/share (RM) | 2.3 | 2.6 | 2.9 | 3.1 |
| PE (x) | 7.0 | 7.9 | 7.5 | 7.2 |
| Div yield (%) | 5.4 | 4.5 | 4.7 | 5.0 |
| P/BV (X) | 1.4 | 1.2 | 1.1 | 1.0 |
| ROE (%) | 19.4 | 15.4 | 14.5 | 13.9 |
| Net Gearing (%) | nm | nm | nm | nm |
Stock and Financial Data
| Shares Outstanding (million) | 872.2 |
|---|---|
| Market Cap (RMmil) | 2,764.9 |
| Book Value (RM/share) | 2.3 |
| P/BV (X) | 1.4 |
| ROE (%) | 19.4 |
| Net Gearing (%) | nm |
Major Shareholders
- Lembaga Tabung Haji (30.8%)
- Employees Provident Fund (18.6%)
- Kumpulan Wang Persaraan (6.6%)
| Free Float | 44.0 |
|---|---|
| Avg Daily Value (RMmil) | 0.7 |
Price performance
| 3mth | 6mth | 12mth | |
|---|---|---|---|
| Absolute (%) | (11.3) | (8.2) | (16.9) |
| Relative (%) | (13.5) | (8.8) | (14.0) |
Note: Graph data is not provided as per instructions (no images).
Investment Highlights
- STMK’s 6MFY25 earnings miss estimates due to higher taxes. It strengthened its market share in family takaful to 27.8% in 2QFY25 (from 26% in 1QFY25), maintaining its top position, and held second place in general takaful with a 22.8% market share. Family takaful contributions rose 19% YoY, driven by credit-related products. CSM grew 5% YTD to RM1.43bil, reflecting solid future profit potential. Valuation wise, the stock is trading at an attractive P/BV of 1.1x considering a FY26F ROE of 14.5% and PER of 7.5%. No change to our neutral 3-star ESG rating.
- Recommendation and valuation. We maintain our BUY call on STMK with a revised TP of RM3.80 (from RM4.70), based on a lower FY26F P/BV of 1.3x (previously 1.6x), reflecting a reduced ROE of 14.5% (vs 16.9%). This follows downward revisions to FY25F-27F earnings by 12.5-12.6% to account for higher taxes from taxable wakalah fees and non-deductible bancatakaful fee amortization. Despite recent share price weakness, we maintain a BUY call given its attractive FY26F P/BV of 1.1x and strong growth in family takaful, which boosted new business CSM and lifted total CSM to RM1.43bil—indicating solid future profit potential.
- 6MFY25 earnings were below estimates, making up 44.2% of our forecast and 44.4% of consensus. The variance was due to higher taxes. Net profit fell 8.9% YoY to RM178mil, mainly due to lower investment income and higher taxes, which offset stronger takaful service results. Takaful service results surged 99.7% YoY, supported by an 8% rise in CSM release to RM134mil, stronger General Takaful contributions, a RM5mil (+16% YoY) increase in risk adjustment release, and favorable claims experience variance of RM83mil. QoQ, net profit fell 11.3% in 2QFY25 due to lower takaful revenue.
- General takaful gross contributions rose 5% YoY, driven by fire and personal accident segments. Family takaful gross contributions grew 19% YoY, led by credit-related products. Net investment result dropped 32% YoY to RM151mil due to unrealized losses from weaker equity performance in family takaful. In contrast, general takaful saw higher profit income from Sukuk investments.
- STMB’s CSM rose 5% YTD to RM1.43bil. The increase was driven by higher new business CSM of RM125mil (vs RM114mil in 6MFY24) from credit-related and treasury segments, along with a favorable RM43mil impact from model estimate changes. Credit related businesses (mortgage/personal financing) made up a substantial 90.3% of the total CSM in 6MFY25.
Company profile
STMK was incorporated on 29 Nov 1984. The holding company, Syarikat Takaful Malaysia Keluarga (STMK) manages the family takaful business while Syarikat Takaful Malaysia Am (STMAB) manages the general takaful business. STMK operates a network of branches in 24 locations nationwide.
For family takaful, STMK commands a market share of 27.8% in terms of gross direct premium/contribution, ranking 1st among 11 takaful operators. Meanwhile, on general takaful industry, STMAB has a market share of 22.8%, ranking 2nd of out 4 takaful operators. If compared to 21 general insurers and 4 takaful operators, STMAB’s market share for stands at 4.8%, ranking 9th in the market.
Investment thesis and catalysts
We maintain a BUY call with a revised TP of RM3.80. FY26F dividend yield is decent at 4.7%. The stock trades at a compelling 1.1x P/BV, supported by a solid 14.5% ROE and low PER of 7.5x
Valuation methodology
We value STMK using a Gordon Growth-based P/B of 1.3x, supported by a cost of equity of 11.6%, beta of 1.3, market risk premium of 6.5%, risk-free rate of 3.5%, and a long-term growth rate of 2%
Risk factors.
Downside risks to our estimates:
- Weaker than expected economic growth impacting growth in gross contributions,
- Unexpected increase in claims impacting insurance service results and
- High interest rates held for much longer in developed markets resulting in a lower valuation of bonds/securities portfolio, impacting investment income.
EXHIBIT 1: VALUATIONS
| COE | 11.6% (from 11.5%) |
| Beta | 1.3 |
| Market risk premium | 6.5% (from 6.1%) |
| Risk free rate | 3.5% (from 3.9%) |
| Long term growth rate | 2% |
| P/BV | FY26 1.3x (from 1.6%) |
| FY26 BVPS | RM2.86 |
| TP | RM3.80 (from RM4.70) |
| ESG Premium | 0 |
| Adjusted TP | RM3.80 (from RM4.70) |
EXHIBIT 2: FINANCIAL HIGHLIGHTS OF SYARIKAT TAKAFUL MALAYSIA KELUARGA (GROUP LEVEL)
| Income Statement (RM Mil, FYE 31 Dec) | % QoQ | % YoY | ||||||
|---|---|---|---|---|---|---|---|---|
| 2Q24 | 1Q25 | 2Q25 | % QoQ | % YoY | 6M24 | 6M25 | % YoY | |
| Takaful revenue | 862 | 981 | 867 | -11.6 | 0.5 | 1,689 | 1,848 | 9.4 |
| Takaful service expenses | -842 | -849 | -833 | -1.8 | -1.1 | -1,607 | -1,682 | 4.7 |
| Takaful service result before retakaful contracts held | 20 | 132 | 34 | -74.2 | 68.6 | 82 | 166 | 103.0 |
| Net expense from retakaful contracts held | -3 | -14 | -12 | -9.9 | 284.8 | -12 | -26 | 122.4 |
| Takaful service result | 17 | 118 | 22 | -81.7 | 27.4 | 70 | 140 | 99.7 |
| Investment income on financial assets not measured at FVTPL | 126 | 132 | 137 | 3.6 | 8.4 | 250 | 269 | 7.6 |
| Investment income others | 9 | 11 | 11 | -6.3 | 11.4 | 18 | 22 | 18.8 |
| Net realised gains and losses | 5 | 23 | 14 | -39.9 | 157.8 | 10 | 37 | 284.6 |
| Net fair value gains and losses on financial assets | 45 | -86 | 19 | 122.1 | -58.2 | 68 | -67 | -198.6 |
| Net impairment loss on financial instruments | 1 | 0 | 2 | >100 | -152.6 | 0 | 1 | 240.3 |
| Net investment income | 187 | 80 | 182 | 127.1 | -2.8 | 345 | 262 | -24.3 |
| Takaful finance expenses from takaful contracts issued | -73 | -56 | -75 | 35.1 | 3.1 | -142 | -131 | -7.4 |
| Retakaful finance income from retakaful contracts held | 8 | 11 | 10 | -8.1 | 21.8 | 17 | 21 | 22.3 |
| Net takaful financial results | -65 | -45 | -65 | 45.5 | 0.8 | -125 | -110 | -11.4 |
| Other operating income | 1 | 0 | 0 | -50.6 | -79.6 | 1 | 1 | -52.3 |
| Other operating expenses | -3 | -2 | -2 | -15.9 | -33.0 | -5 | -5 | -10.2 |
| Profit before zakat and taxation | 137 | 151 | 136 | -10.1 | -0.5 | 287 | 287 | 0.0 |
| Tax expense | -39 | -53 | -47 | -11.1 | 20.4 | -84 | -100 | 19.5 |
| Minority interest | -4 | -3 | -5 | 40.9 | 28.8 | -7 | -8 | 18.1 |
| Reported Net Profit for the period | 94 | 95 | 84 | -11.3 | -10.5 | 196 | 178 | -8.9 |
| PATAMI | 94 | 95 | 84 | -11.3 | -10.5 | 196 | 178 | -8.9 |
| Core EPS (sen) | 11.2 | 10.8 | 9.6 | -11.4 | -14.2 | 23.4 | 20.5 | -12.6 |
| Source: Company, AmInvestment Bank Bhd | ||||||||
EXHIBIT 3: FINANCIAL HIGHLIGHTS OF GENERAL TAKAFUL
| Income Statement (RM Mil, FYE 31 Dec) | % QoQ | % Yoy | ||||||
|---|---|---|---|---|---|---|---|---|
| 2Q24 | 1Q25 | 2Q25 | % QoQ | % Yoy | 6M24 | 6M25 | % Yoy | |
| Takaful revenue | 366 | 343 | 351 | 2.2 | -4.1 | 717 | 695 | -3.1 |
| Takaful service expenses | -366 | -339 | -350 | 3.4 | -4.3 | -716 | -689 | -3.8 |
| Takaful service result before retakaful contracts held | 0 | 4.9 | 1.1 | -78.0 | 208.5 | 1 | 6 | 900.0 |
| Net expense from retakaful contracts held | -9 | -11 | -10 | -6.3 | 14.9 | -17 | -21 | 21.9 |
| Takaful service result | -8 | -6 | -9 | 55.1 | 6.7 | -16 | -15 | -10.4 |
| Investment income on financial assets not measured at FVTPL | 14 | 16 | 16 | 1.0 | 11.6 | 29 | 32 | 12.6 |
| Investment income – others | 0 | 0 | 0 | 69.3 | -35.9 | 0 | 0 | -22.3 |
| Net realised gains and losses | 0 | 1 | 1 | -51.0 | 42.6 | 0 | 2 | 333.5 |
| Net fair value gains and losses on financial assets | 0 | 0 | 0 | -118.8 | n.m. | 0 | 0 | n.m. |
| Net impairment loss on financial instruments | 0 | 0 | 0 | -1334.8 | -288.1 | 0 | 0 | 264.2 |
| Net investment income | 15 | 17 | 17 | -1.1 | 14.7 | 29 | 34 | 18.4 |
| Takaful finance expenses from takaful contracts issued | -15 | -17 | -17 | 0.9 | 13.1 | -30 | -34 | 15.8 |
| Retakaful finance income from retakaful contracts held | 9 | 11 | 10 | -6.3 | 14.9 | 17 | 21 | 21.9 |
| Net takaful financial results | -7 | -6 | -7 | 12.8 | 10.7 | -13 | -14 | 7.8 |
| Other operating income | 0 | 0 | 0 | 44.6 | -766.7 | 0 | 0 | n.m. |
| Other operating expenses | 0 | 0 | 0 | -42.9 | -129.6 | 0 | 0 | 142.3 |
| Source: Company, AmInvestment Bank Bhd | ||||||||
EXHIBIT 4: FINANCIAL HIGHLIGHTS OF FAMILY TAKAFUL
| Income Statement (RM Mil, FYE 31 Dec) | % QoQ | % Yoy | ||||||
|---|---|---|---|---|---|---|---|---|
| 2Q24 | 1Q25 | 2Q25 | % QoQ | % Yoy | 6M24 | 6M25 | % Yoy | |
| Takaful revenue | 480 | 608 | 486 | 26.8 | 1.4 | 929 | 1,095 | 17.8 |
| Takaful service expenses | -588 | -615 | -566 | 4.5 | -3.7 | -1,119 | -1,180 | 5.5 |
| Takaful service result before retakaful contracts held | -108 | -6 | -79 | -94.1 | -26.6 | -190 | -86 | -54.8 |
| Net expense from retakaful contracts held | 10 | 0 | 0 | -101.4 | -99.3 | 14 | 0 | -100.4 |
| Takaful service result | -99 | -7 | -79 | -93.4 | -19.5 | -176 | -86 | -51.3 |
| Investment income on financial assets not measured at FVTPL | 88 | 91 | 95 | 2.7 | 7.3 | 175 | 185 | 5.8 |
| Investment income – others | 8 | 10 | 9 | 27.5 | 21.5 | 15 | 19 | 27.1 |
| Net realised gains and losses | 4 | 16 | 10 | 305.5 | 142.9 | 6 | 26 | 306.6 |
| Net fair value gains and losses on financial assets | 44 | -82 | 18 | -286.1 | -58.2 | 66 | -64 | -196.3 |
| Net impairment loss on financial instruments | 1 | 0 | 1 | -143.2 | 30.3 | 1 | 1 | 28.4 |
| Net investment income | 145 | 34 | 134 | -76.4 | -8.0 | 264 | 168 | -36.3 |
| Takaful finance expenses from takaful contracts issued | -45 | -28 | -46 | -39.4 | 2.3 | -86 | -74 | -14.2 |
| Retakaful finance income from retakaful contracts held | -1 | 0 | 0 | -122.9 | -87.7 | 0 | 0 | -229.8 |
| Net takaful financial results | -46 | -27 | -46 | -40.4 | 1.2 | -86 | -74 | -14.3 |
| Other operating income | 0 | 0 | 0 | -54.7 | -55.2 | 0 | 0 | -9.9 |
| Other operating expenses | -1 | 0 | 0 | -70.9 | -72.3 | -2 | -1 | -61.1 |
| Source: Company, AmInvestment Bank Bhd | ||||||||
EXHIBIT 5: CHANGE IN EARNINGS
| RMm | FY25F | FY26F | FY27F | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Old | New | % | Old | New | % | Old | New | % | |
| Net profit | 403 | 352 | -12.6% | 419 | 366 | -12.6% | 442 | 387 | -12.5% |
| Tax expense | (140) | (190) | 36.2% | (145) | (198) | 36.2% | (154) | (209) | 36.2% |
EXHIBIT 6: ESG SCORE
| Environmental assessment | Weightage | Rating | Rationale | ||||
|---|---|---|---|---|---|---|---|
| Parameters | * | * | * | ||||
| 1 | Allocation of investments in high risk ESG sectors | % of total investments allocated | 40% | * | * | ||
| 2 | Scope 1 GHG Emissions to insurance service results | t/Co2e/RM’Mil | 15% | * | * | ||
| 3 | Scope 2 GHG Emissions to insurance service results | t/Co2e/RM’Mil | 15% | * | * | 6.15 in 2024 | |
| 4 | Scope 3 GHG Emissions to insurance service results | t/Co2e/RM’Mil | 15% | * | * | 21.4 in 2024 | |
| 5 | Electricity consumption to insurance service results | MWh/RM’Mil | 10% | * | * | 0.08 in 2024 VS. 0.19 in 2023 and 0.17 in 2022 | |
| 6 | Water consumption to insurance service results | m3/RM’Mil | 5% | * | * | ||
| Weighted score for environmental assessment | 100% | * | * | ||||
| Social assessment | |||||||
| Parameters | * | * | * | ||||
| 1 | Customer policy renewal ratio | % | 30% | * | * | ||
| 2 | Corporate Social Responsibility investments or spend | % of total insurance service results | 25% | * | * | RM10.07mil invested in 2024 (+15% YoY) | |
| 3 | Claims settlement ratio | % | 20% | * | * | ||
| 4 | Workforce diversity – women in senior management and above (excluding board directors) | % of total workforce | 15% | * | * | 23% in 2024 | |
| 5 | Average training hours per employee | hours | 10% | * | * | ||
| Weighted score for social assessment | 100% | * | * | ||||
| Governance assessment | |||||||
| Parameters | * | * | * | ||||
| 1 | Board age diversity | % under the 61 to 70 years old category | 20% | * | * | 33.3% in 2024 | |
| 2 | Board women representation | % of total board directors | 15% | * | * | 83.3%in 2024 vs 37.5% representation in 2023 | |
| 3 | Directors with tenure of 3-6 years | % in the 3 to 6 years or more category | 15% | * | * | 71% | |
| 4 | Independent board directors | % of total board directors | 20% | * | * | 85.7% independent directors | |
| 5 | Remuneration to directors | % of insurance service expenses | 10% | * | * | ||
| 6 | Cybersecurity, Privacy and Data Protection | Confirmed incidents | 20% | * | * | ||
| Weighted score for governance assessment | 100% | * | * | ||||
| Environmental score | 40% | * | * | ||||
| Social score | 25% | * | * | ||||
| Governance score | 35% | * | * | ||||
| Overall ESG Score | 100% | * | * | ||||
| Source: Company, AmInvestment Bank | |||||||
EXHIBIT 6: FINANCIAL DATA
| Income Statement (RMmil, YE 31 Dec) | FY23 | FY24 | FY25F | FY26F | FY27F |
|---|---|---|---|---|---|
| Insurance revenue | 2942 | 3576 | 3159 | 3356 | 3553 |
| Insurance service expenses | -2571 | -3299 | -2749 | -2920 | -3055 |
| Insurance service result before reinsurance | 371 | 277 | 411 | 436 | 497 |
| Net expense/income from reinsurance contracts held | -197 | -59 | -133 | -145 | -166 |
| Insurance service result | 175 | 218 | 278 | 291 | 331 |
| Investment income | 515 | 554 | 561 | 591 | 603 |
| Realised gains and losses | 24 | 4 | 21 | 23 | 26 |
| Fair value gains and losses and other income | -3 | 43 | 5 | 4 | 3 |
| Other income | -6 | 3 | 0 | 0 | 0 |
| Total investment income | 530 | 605 | 587 | 618 | 632 |
| Net takaful finance results | -190 | -241 | -199 | -211 | -224 |
| Other operating income | 3 | 2 | 2 | 1 | 1 |
| Other operating expenses | -9 | -9 | -124 | -133 | -142 |
| Finance costs | 0 | 0 | 0 | 0 | 0 |
| Share of profit after tax of equity accounted associate company | 0 | 0 | 0 | 0 | 0 |
| Profit before tax | 508 | 575 | 544 | 566 | 597 |
| Tax expense | -161 | -184 | -190 | -198 | -209 |
| Minority interest | 0 | -13 | -1 | -2 | -2 |
| Net profit | 347 | 378 | 352 | 366 | 387 |
| Core net profit | 347 | 378 | 352 | 366 | 387 |
| Balance Sheet (RMmil, YE 31 Dec) | FY23 | FY24 | FY25F | FY26F | FY27F |
| Cash & deposits with FIs | 851 | 650 | 495 | 378 | 288 |
| Loans & receivables | 0 | 0 | 0 | 0 | 0 |
| Insurance receivables | 0 | 0 | 0 | 0 | 0 |
| Investment securities | 0 | 0 | 0 | 0 | 0 |
| Investment properties | 40 | 57 | 79 | 111 | 155 |
| Retakaful assets | 1,107 | 1,517 | 1,659 | 1,979 | 2,398 |
| Fixed assets | 236 | 235 | 236 | 237 | 238 |
| Other assets | 12,172 | 14,208 | 15,474 | 19,125 | 21,690 |
| Total assets | 14,408 | 16,666 | 17,944 | 21,829 | 24,768 |
| Takaful contract liabilities | 12,050 | 14,060 | 15,041 | 18,653 | 21,336 |
| Retakaful contract liabilities | 268 | 257 | 248 | 238 | 229 |
| Borrowings | 0 | 0 | 0 | 0 | 0 |
| Deferred tax liabilities | 0 | 0 | 0 | 0 | 0 |
| Other liabilities | 375 | 385 | 362 | 409 | 426 |
| Total liabilities | 12,692 | 14,702 | 15,651 | 19,300 | 21,991 |
| Share capital | 241 | 241 | 358 | 358 | 358 |
| Reserves | 1,473 | 1,710 | 1,902 | 2,171 | 2,420 |
| Shareholders’ funds | 1,714 | 1,951 | 2,260 | 2,529 | 2,778 |
| Key Ratios (YE 31 Dec) | FY23 | FY24 | FY25F | FY26F | FY27F |
| ROE (%) | 20.2 | 19.4 | 15.4 | 14.5 | 13.9 |
| ROA (%) | 2.5 | 2.4 | 2.0 | 1.8 | 1.7 |
| Insurance service results growth (%) | -15.2 | 24.7 | 27.5 | 4.9 | 13.7 |
| Core net profit growth (%) | 22.6 | 9.0 | -6.9 | 4.0 | 5.5 |
| EPS growth (%) | 22.5 | 9.0 | -10.6 | 4.0 | 5.5 |
| Book value per share growth (%) | 24.5 | 14.2 | 13.2 | 10.4 | 10.0 |
| Key Assumptions (YE 31 Dec) | FY23 | FY24 | FY25F | FY26F | FY27F |
| Yield from investment portfolio (%) | 5.1 | 4.8 | 5.2 | 4.8 | 4.6 |
| Source: Company, AmInvestment Bank Bhd estimates | |||||
DISCLOSURE AND DISCLAIMER
This report is prepared for information purposes only and it is issued by AmInvestment Bank Berhad (“AmInvestment”) without regard to your individual financial circumstances and objectives. Nothing in this report shall constitute an offer to sell, warranty, representation, recommendation, legal, accounting or tax advice, solicitation or expression of views to influence any one to buy or sell any real estate, securities, stocks, foreign exchange, futures or investment products. AmInvestment recommends that you evaluate a particular investment or strategy based on your individual circumstances and objectives and/or seek financial, legal or other advice on the appropriateness of the particular investment or strategy.
The information in this report was obtained or derived from sources that AmInvestment believes are reliable and correct at the time of issue. While all reasonable care has been taken to ensure that the stated facts are accurate and views are fair and reasonable, AmInvestment has not independently verified the information and does not warrant or represent that they are accurate, adequate, complete or up-to-date and they should not be relied upon as such. All information included in this report constitute AmInvestment’s views as of this date and are subject to change without notice. Notwithstanding that, AmInvestment has no obligation to update its opinion or information in this report. Facts and views presented in this report may not reflect the views of or information known to other business units of AmInvestment’s affiliates and/or related corporations (collectively, “AmBank Group”).
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AmInvestment is not acting as your advisor and does not owe you any fiduciary duties in connection with this report. The Relevant Person may provide services to any company and affiliates of such companies in or related to the securities or products and/or may trade or otherwise effect transactions for their own account or the accounts of their customers which may give rise to real or potential conflicts of interest.
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