Great Eastern reported weak 2Q10 net earnings of $74.4m (-24% yoy, -59% qoq) due to lower profits from insurance ops, which slumped 51% qoq to $75m. Company attribute fall to poor investment performance arising from concerns relating to eurozone debt, as bond and equity prices around the world fell sharply. Profit from investments -68% qoq due to a loss on sale of investments & changes in fair value. New sales rose 23% qoq to $166m, boosted by sale of ILP premium products in M'sia.
Fees & other income +9% qoq to $18.4m due to the growth in AUM by Lion Global Investors, which rose to $27.8b. 2Q NAV stood at $7.90 vs ROE of 8.4%. Despite traditionally better 2H, group cautioned that its future performance may be affected by interest rate changes & volatility in the financial markets arising from eurozone debt issues & possible economic challenges in US, Europe & China. Citigroup has downgraded the stock to from a buy to sell with TP of $15.50 based on 1.2x P/Embedded value.
No comments:
Post a Comment