TUNEPRO: Robust Performance on Cost Efficiencies and Travel Rebound Drives Optimistic Outlook
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A key player in the insurance sector recorded a solid financial performance for the first nine months of fiscal year 2025 (9M25), with net profit reaching RM20.7 million. This result accounts for 62.6% of the full-year forecast and is considered in line with expectations, with analysts anticipating a stronger fourth quarter driven by peak travel season momentum.
The 9M25 period saw substantial improvement in insurance service results, which turned from a loss of RM0.7 million in 9M24 to a profit of RM27.4 million. Consequently, Pre-Tax Profit (PBT) surged to RM32.3 million, a significant recovery from a Pre-Tax Loss of RM5.0 million in the previous comparable period. This robust performance was primarily attributed to several factors: an increased emphasis on travel insurance within its portfolio, favorable claims experience in both motor and fire segments, and effective cost optimization initiatives.
The travel insurance segment demonstrated strong growth, expanding 31.8% year-on-year, fueled by robust demand, integrated product offerings, and strategic regional expansion. Concurrently, the motor loss ratio improved by 4.6 percentage points year-on-year, a testament to the optimized motor portfolio with a greater focus on the more profitable private car segment. These efforts collectively led to a significant 10.9 percentage point improvement in the 9M25 combined ratio, settling at 91.9%.
Performance Review: Quarterly Fluctuations
However, on a quarter-on-quarter (QoQ) basis, PBT experienced a 14.5% decline to RM10.0 million. This was primarily due to lower investment income and a negative contribution from its Thai associate.
Future Outlook: Sustained Growth and Dividends
Looking ahead, analysts project a robust fourth-quarter performance, with the peak travel season expected to significantly boost results. This positive momentum is anticipated to continue into 2026, supported by initiatives such as Visit Malaysia Year, airline expansion plans, and strengthening travel demand across Asia. With the ongoing turnaround, dividend payments are expected to resume in FY25, offering an attractive 5.2% yield.
Based on this positive outlook and strong operational improvements, TA Securities maintains its “Buy” recommendation on the company. The investment bank holds an unchanged target price of RM0.48 per share, representing a significant upside from the last traded price of RM0.34.
