Great Eastern Holdings Financial Report Analysis – 39% Net Profit Growth

Report Date and Financial Year

The report is dated 6 November 2024 and covers the financial results for the first nine months of 2024 (9M-24).

Business Description

Great Eastern Holdings Limited is a prominent insurance company operating predominantly in Singapore, Malaysia, and emerging markets like Indonesia and Brunei. Its core business segments include life insurance, general insurance, and investment management.

Industry Position

Great Eastern is a significant player in the insurance industry within its geographic footprint. It faces competition from other major insurers in the region but maintains a strong market share due to its established presence and comprehensive product offerings.

Revenue Streams and Customer Base

The company’s revenue streams are primarily derived from premiums on life and general insurance policies, investment income, and fees from asset management. Its customer base spans individual policyholders, corporate clients, and institutional investors.

Financial Analysis

Income Statement

Key highlights from the income statement include a substantial increase in profit attributable to shareholders, which rose by 39% from S\$617.4 million in 9M-23 to S\$860.5 million in 9M-24. This growth is driven by higher profits from insurance businesses and strong investment performance.

Balance Sheet

The report does not provide a detailed balance sheet. However, given the significant increase in profits and total comprehensive income, the company’s financial position appears robust.

Cash Flow Statement

The report does not include specific details on the cash flow statement. Investors should review the full financial statements for a comprehensive understanding.

Key Financial Highlights

• Total Weighted New Sales (TWNS) increased by 19% to S\$1,363.3 million, driven by strong performance in core markets.
• New Business Embedded Value (NBEV) grew by 13% to S\$515.8 million, indicating higher sales profitability.
• Profit from insurance business increased by 17% to S\$638.1 million due to higher Contract Service Margin (CSM) and Risk Adjustment (RA) releases.
• Profit from Shareholders’ Fund surged by 201% to S\$222.4 million, reflecting strong investment performance and mark-to-market gains.
• Total Comprehensive Income rose by 145% to S\$1,319.5 million, supported by higher mark-to-market gains in equities and favorable interest rate movements.

Special Activities

The company has shifted its focus towards regular premium sales over single premium sales, aiming to stabilize revenue streams and improve long-term profitability.

Investment Recommendations

For Current Shareholders

If you are currently holding shares of Great Eastern Holdings, it is recommended to continue holding. The company has demonstrated strong financial performance with significant profit growth, indicating a positive outlook.

For Potential Investors

If you do not currently hold shares in Great Eastern Holdings, it is advisable to consider investing. The company’s solid financial results, strong market position, and strategic focus on regular premium sales present a compelling investment opportunity.

Disclaimer

This analysis is based on the financial report provided and should not be solely relied upon for making investment decisions. It is recommended to seek professional financial advice before making any investment decisions.