Great Eastern

Great Eastern: good set of 1Q12 results. Net profit at $262.5m, +65% yoy, supported by growth in underwriting profit as a result of the successful shift in pdt mix over past qtrs, as well as an increase in invmt income, and mark-to-market gains from the recovery of global financial mkts. ROE jumped to 6.4% from 3.9% yoy. The Group reported total weighted new sales of $176.8m, with a significant shift from single to regular premium pdts. The Spore business benefited from the strong, sustained demand for regular premium pdts from the bancassurance channel, in particular the premier banking customer segment, while Msia continued to register healthy sales of invmt-linked pdts. New Business Embedded Value (NBEV) grew by 14% yoy to $83.8m, driven by improvement in pdt mix towards regular premium and protection-based pdts from the tied agency and financial advisory channels. Going forward, mgt will continue to target the ageing population and growing, affluent middle class in Spore. In Msia, mgt will target the young working adults in Msia and to increase the penetration of takaful pdts. The stock trades at 1.47x P/B, 13.1x P/E.