Great Eastern

Great Eastern: Overall, 3Q13 net profit was 54% lower y/y, as there was a one-off post-tax gain of $421.6m from the stake sale of APB and FNN last year. Excluding the one-off gain, core net profit would be 43% higher y/y on better profit from insurance business. In 3Q13, the group recorded operating profit from insurance business of $138.6m, +26% y/y, built on better underwriting performance and higher net invmt income across all insurance funds. Total weighted new sales rose 38% y/y to $274.7m, led by the continued growth in Spore and Msia operations. The group’s new business embedded value (NBEV), a measure of its long term economic profitability, increased 18% y/y to $100.8m, reflecting stronger sales performance. Meanwhile, the non-operating profit from insurance business rose by 27% y/y to $91.1m, largely contributed by unrealized mark-to-market gains brought about by the partial recovery in financial markets following the US Fed’s Sep ’13 decision to maintain its QU programme. This resulted in a decline in interest rates, as well as other market factors such as the narrowing of credit and swap spreads. Capital adequacy ratios of the group’s insurance subsidiaries in both Spore and Msia remained well above the min regulatory ratios of 120% and 130% in the two countries respectively, reflecting the strong capital position of the group. Counter trades at 1.7x P/B, 12.1x annualized 9M13 P/E.