JANASHAKTHI INSURANCE COMPANY PLC (JINS.N0000)

UKboy wrote:

econ wrote:I think all the janashakthi group companies (CSEC,JINS,CFVF) are still undervalued compare with other companies in the financial sector.

That is a well known factor in the market for years..!!
How higher their prices go up eventually will come back more or less to the same level

UK BOY you have the most sensible view on these stock...!

why JINS .N0000 ( janashakthi insurance) not moving even the fundamentals are strong..
even the they pay a very good dividend..

That is the problem with CSE. Fundamental don't move....

Not pbm with CSE, Pbm with director, Schaffer.. Matser mind behind CFVF group..That s less volatile share even during up-trend also

JINS:

Total number of shares as at 06/30/2011: 363,000,132

Profits for the 6 months ending 31/12/2010: 624,910,000 EPS = 1.71
Profits for 6 months ending 06/30/2011: 218,115,000 EPS = 0.60 (the quarterly report says 0.77 but I don't know how they got it).

If you look at the two statements you can see that for the 6 months ending 31/12/2010, they have a 200Mil difference in "Other revenue" section (income statement). Let's be conservative and estimate an EPS of 0.60 for the next 6 months (ending 31/12/2011) - I suppose they'll publish this report soon.

So, our estimated EPS for the year ending 31/12/2011 is 1.2 per share. So, this share has a P/E around 10 for a price around 12 Rs.

The question is, is it a good P/E compared to other financial institutions / banks? analyse COMB.X, HNB.X, SAMP.N and see for yourself. Also compare dividends. A share can be "fundamental" (i.e not JUNK) but that doesn't mean its share price is always justified.

My personal opinion is JINS.N is an OK share for around 12 rupees (I already hold some quantity around 11.50 I think). But I can't say for sure that this share will not fall further (there are banks with much lower P/E values - this share "could" correct more - I don't know).

Cheers!

UPDATE: SOME ISSUES WITH THIS POST HAS BEEN CORRECTED BELOW (READ THE WHOLE DISCUSSION)

I'm more worried about their ability to keep paying dividends. I collected some between LKR 10.9 - 13.00 as part of dividend earning long term portfolio. At LKR 11.00, a LKR 1.00 dividend is a 9% yield.

Is this worth (less than 12) as a short term investment?

Argh!

I've compared an insurance company against financial institutions / banks. I think that is wrong. I have JINS and banks on the same watch list, this is what lead to this mistake.

In any case, the rest of the post holds.

Cheers!

anubis wrote:JINS:

Total number of shares as at 06/30/2011: 363,000,132

Profits for the 6 months ending 31/12/2010: 624,910,000 EPS = 1.71
Profits for 6 months ending 06/30/2011: 218,115,000 EPS = 0.60 (the quarterly report says 0.77 but I don't know how they got it).

If you look at the two statements you can see that for the 6 months ending 31/12/2010, they have a 200Mil difference in "Other revenue" section (income statement). Let's be conservative and estimate an EPS of 0.60 for the next 6 months (ending 31/12/2011) - I suppose they'll publish this report soon.

So, our estimated EPS for the year ending 31/12/2011 is 1.2 per share. So, this share has a P/E around 10 for a price around 12 Rs.

The question is, is it a good P/E compared to other financial institutions / banks? analyse COMB.X, HNB.X, SAMP.N and see for yourself. Also compare dividends. A share can be "fundamental" (i.e not JUNK) but that doesn't mean its share price is always justified.

My personal opinion is JINS.N is an OK share for around 12 rupees (I already hold some quantity around 11.50 I think). But I can't say for sure that this share will not fall further (there are banks with much lower P/E values - this share "could" correct more - I don't know).

Cheers!

Thanks anubis.
Your price seems to be OK for short and medium term.
Only my worry regarding this share is the management.
We'll see.

@raa: an interesting question, have you analysed JINS.N dividend history against EPS values? I saw a research report in the research section about dividend histories of different listed companies: http://research.srilankaequity.com/t238-cse-quoted-company-s-dividend-history-updated-on-13-02-2012 (you need to re-register there).

May it's worth looking at JINS.N dividend history (if that's available in above report) and checking if they have been consistent.

Cheers!

anubis wrote:JINS:

Total number of shares as at 06/30/2011: 363,000,132

Profits for the 6 months ending 31/12/2010: 624,910,000 EPS = 1.71
Profits for 6 months ending 06/30/2011: 218,115,000 EPS = 0.60 (the quarterly report says 0.77 but I don't know how they got it).

If you look at the two statements you can see that for the 6 months ending 31/12/2010, they have a 200Mil difference in "Other revenue" section (income statement). Let's be conservative and estimate an EPS of 0.60 for the next 6 months (ending 31/12/2011) - I suppose they'll publish this report soon.

So, our estimated EPS for the year ending 31/12/2011 is 1.2 per share. So, this share has a P/E around 10 for a price around 12 Rs.

The question is, is it a good P/E compared to other financial institutions / banks? analyse COMB.X, HNB.X, SAMP.N and see for yourself. Also compare dividends. A share can be "fundamental" (i.e not JUNK) but that doesn't mean its share price is always justified.

My personal opinion is JINS.N is an OK share for around 12 rupees (I already hold some quantity around 11.50 I think). But I can't say for sure that this share will not fall further (there are banks with much lower P/E values - this share "could" correct more - I don't know).

Cheers!

Anubis,
Their 2010 Year ending eps was 2.12. Usually for Insurance companies last quarter of the year earnings are higher than the previous quarters ( 6 Month up to June). I am not sure whether this year eps will drop as much as 1.2 . They already reported 0.77 eps for 2011 June . That means 6 month earning will be only Rs 0.43.

There is some investor sentiment issue due to owner family. CFVF and CSEC already had some issues . But JINS after an initial 2009 issue with the insurance board which was resolved quickly ( not a financial fraud) had so far been fraud free. I do not know whether there is any issue recently.

ANyway , jsut note the below facts

1) IPO price in 2008 was Rs 12. Now trading below IPO after 4 years!
2) I recall million of shares were traded when it ran over Rs 20.
3) In 2009 they paid RS 2 dividend. Afterward they have been paying RS 1 dividned. Dividend yield will be one of the highest at CSE for this share if they pay Rs 1 again and your share average is around Rs 12.

@slstock: thank you very much for this valuable info!

Experience matters!!!

We'll see how it'll go down this year, hoping for the best!!!

(PS: I think you meant "Their 2010* Year ending eps was 2.12)

Cheers!

anubis wrote:JINS:

Total number of shares as at 06/30/2011: 363,000,132

Profits for the 6 months ending 31/12/2010: 624,910,000 EPS = 1.71
Profits for 6 months ending 06/30/2011: 218,115,000 EPS = 0.60 (the quarterly report says 0.77 but I don't know how they got it).

If you look at the two statements you can see that for the 6 months ending 31/12/2010, they have a 200Mil difference in "Other revenue" section (income statement). Let's be conservative and estimate an EPS of 0.60 for the next 6 months (ending 31/12/2011) - I suppose they'll publish this report soon.

So, our estimated EPS for the year ending 31/12/2011 is 1.2 per share. So, this share has a P/E around 10 for a price around 12 Rs.

The question is, is it a good P/E compared to other financial institutions / banks? analyse COMB.X, HNB.X, SAMP.N and see for yourself. Also compare dividends. A share can be "fundamental" (i.e not JUNK) but that doesn't mean its share price is always justified.

My personal opinion is JINS.N is an OK share for around 12 rupees (I already hold some quantity around 11.50 I think). But I can't say for sure that this share will not fall further (there are banks with much lower P/E values - this share "could" correct more - I don't know).

Cheers!

You have got the number wrong... it is not 218,115,000 it is 280,115,000... Refer quarterly accounts!

Dividend Paid after the IPO.
From their annual Report.


Interim Dividend announced in 2011.(May be that will be Final Dividend for 2011)

@greedy: many thanks for correcting this!

To be honest I was looking all over the place for what mistake I have made. I maintain separate spread-sheets for analysis and it seems I have entered the wrong number when populating the sheet (sadly, it's a manual process atm).

So, re-estimated EPS = 0.77 * 2 = 1.54

And according to slstock this could be even higher. So, it "looks" this share is undervalued at the moment. Again, no promises, it could go either ways - that's the nature.

Anyway, let's wait and see

Cheers!

According to the CSE website..

Dividends were post IPO
4Q2008 - 0.50
4Q2009 - 2.00
1Q2010 - 1.00
1Q2011 - 1.00
1Q2012 - ?.??

So if one bought a 1,000 shares at IPO @ 12.00 and still held till today, they'd still be up because they have already received LKR 4,500.00 as dividends. That is a 9% return per year!!

If they sold at LKR 20.00 last year, then profit would be LKR 4,500 + LKR 8,000 = LKR 12,500.

I'm happy if i can get 9% a year on a share until I wait for the share price to run to LKR 24.00 and sell out. That is my plan.

Continuing from sriranga's post on dividends:

[2010]
Profits = 770,348,000
EPS = 2.12
Dividend = 1

[2011] (so far)
Profits = 280,115,000
EPS = 0.77

Since they have given 1Rs dividend for 2011 already, I'd expect the EPS for 2011 to be around the same levels as in 2010 (at the least). In order to get that much EPS, their profits should be around (770,348,000 - 280,115,000) 490,233,000 for the last 6 months ended 31/12/2011. And the corresponding EPS for that period would be (490,233,000 / 363,000,132) 1.35

Note that I have assumed that the share count has remained constant throughout 2010 - 2011 (which i believe is the case - according to reports).

So, If they report an EPS of 1.35 or above in their next report (for the 6 months ending 31/12/2011), we can say the company is on track!

Or is this not a correct judgement? I'm not confident in the above way of reasoning (bit of a newbie still). Please correct me if I'm wrong.

Cheers!

Investment portfolio of JINS mainly consist of treasury bills and treasury bonds. During stock market boom and lower interest rates in 2010 and 2011, JINS's was not on a good side. Because they did not benefit from the stock market boom. But now the opposite happening in 2012! So... will that benefit the company in some way?


I DO NOT HOLD JINS SHARES.

anubis wrote:Continuing from sriranga's post on dividends:

[2010]
Profits = 770,348,000
EPS = 2.12
Dividend = 1

[2011] (so far)
Profits = 280,115,000
EPS = 0.77

Since they have given 1Rs dividend for 2011 already, I'd expect the EPS for 2011 to be around the same levels as in 2010 (at the least). In order to get that much EPS, their profits should be around (770,348,000 - 280,115,000) 490,233,000 for the last 6 months ended 31/12/2011. And the corresponding EPS for that period would be (490,233,000 / 363,000,132) 1.35

Note that I have assumed that the share count has remained constant throughout 2010 - 2011 (which i believe is the case - according to reports).

So, If they report an EPS of 1.35 or above in their next report, we can say the company is on track!

Or is this a not correct judgement? I'm not confident in the above way of reasoning (bit of a newbie still). Please correct me if I'm wrong.

Cheers!

Ofcourse if we they can show YoY growth that will be good. SO if they beat 2010 eps of 2.12 it will be good. Even oif they fall a bit short I guess they could give a Rs 1 Dividend. ( presuming nothing drastic happened within the last 6 months)

Please see the following detail.
From that you can judge their past performance to certain extend.

@sriranga: I used your summary to calculate the profits for each year (EPS * NO.SHARES) and then divided those profits from the current share count to get an effective EPS:
https://2img.net/h/oi43.tinypic.com/jafchw.png

As you can see, their EPS has been growing for last 3 years. Although before 2008 we can't see an exact pattern.

@admins: if you can please kindly embed that image into this post itself. For some reason embedding images doesn't work on chrome.

Cheers!



Done Anubis.
Thanks for your hardwork.

@sriranga: thank you too, I've learned a lot from your posts

Cheers!

Even if their EPS reduces, they have little forecasted expenditure in terms of cap ex and working capital requirements.

The data Anubis and Sriranga have displayed is really helpful. +reps...

You can see JINS maturing and normalising as a company in the last two years... trend volatility is less and growth prospects seem to be maturing or slowing down to an acceptable level.. I like to see these trends in choosing a safe company to invest.

The only thing missing is data for recurring income and recurring EPS which should give a clearer picture of the core business performance.

Just out of curiosity I wanted to verify slstock's claim on second quarter results being much higher than the first. I only have reports for last two years (from http://www.cse.lk/companiesprofile/incomestatement.htm?id=941&symbol=JINS.N0000), and this is how it looks:

EPS for 6 months ending 30/06/2009: 0.73
EPS for 6 months ending 31/12/2009: 1.08 (change is 147%)

EPS for 6 months ending 30/06/2010: 0.40
EPS for 6 months ending 31/12/2010: 1.72 (change is 430%)

EPS for 6 months ending 30/06/2011: 0.77
EPS for 6 months ending 31/12/2011: ?? (change is ??%)

So, it seems slstock's claim is true. We'll have to wait and see how it'll work this year

Cheers!

More details of their income statement..... JINS income comes from two areas

1) Underwriting Results
2) Other Income (Mainly from their investments)

Lets see underwriting results for last four half years and their corresponding prior periods...

30/06/2011=====>LKR506,178k / LKR277,604K
31/12/2010=====>LKR603,066K / LKR601,802K
30/06/2010=====>LKR277,604K / LKR539,511K
21/12/2009=====>LKR391,651K / LKR366,864K

Based on this we can expect a better underwrtiting results for the six months ended 31/12/2011

Other Income for last four half years and corresponding prior periods.....

30/06/2011=====>LKR558,661k / LKR559,332K
31/12/2010=====>LKR707,066K / LKR522,673K
30/06/2010=====>LKR559,332K / LKR498,653K
21/12/2009=====>LKR518,422K / LKR544,756K


Net Profit for last four half years and corresponding prior periods.....

30/06/2011=====>LKR280,115k / LKR145,438KK
31/12/2010=====>LKR624,910K / LKR391,651K
30/06/2010=====>LKR145,438K / LKR265,622KK
21/12/2009=====>LKR391,651K / LKR366,864K

If you go through last year annual report, you will find JINS had a realised investment gain of LKR288mn ( This item is from sale of investments). This is most probably an one off item. Bacause if we look at 2009 and 2008 annual reports, the amount is immaterial

Net realised gains as per annual reports.

2010 AR =====> LKR288,709K
2009 AR =====> LKR3,340K
2008 AR =====> LKR7,101K
2007 AR =====> LKR (2,399K)

We could expect a drop in other income compared to previous year unless JINS has a similar gain this year too. But it little unlikely.

There is a possibility that higher underwriting results may offset this drop in other income!

My apologies Anubis.... while I was writing a reply you have posted a reply. Some of the information may have repeated in my reply.

I'm hearing some people claiming in the posts regarding JINS that director of the company Mr. Shafter purposely not allowing to appreciate share price of JINS which i see it as a baseless statement. Usually directors of the companies wants to appreciate the share price. Appreciate your views regarding this..

@greedy: no worries, many thanks for your analysis!

Last year, there was a big increase in new car sales. That plus higher interest rates scenario and so close to dividend pay out , looks very attractive to me.

I am averaging on a share for the first time. Dollar averaging that I learned from a Sriranga post.

Thanks for all the above post. Very interesting to lay folk, like me.

Guys (gender neutral), wish me and JINS luck

greedy wrote:Investment portfolio of JINS mainly consist of treasury bills and treasury bonds. During stock market boom and lower interest rates in 2010 and 2011, JINS's was not on a good side. Because they did not benefit from the stock market boom. But now the opposite happening in 2012! So... will that benefit the company in some way?

This is a very good and clever observation / understanding.
This story is same for others in the same group. CFVF, CSEC.
I think we all have knowledge to guess the outcome.

Can you remember what and how CFVF earned during 2009 ? Not from falling shares but from TB etc.

Mr. Shafter was very adamant in this case. When the shareholders pushed him last year - 2010 AGM - to invest billions they had with CFVF in shares to get better earnings in 2011/12 he (with his sister & others) never showed any intention to changed his stand . He refused and continued keeping the billions in TBs and other instruments.
I think they are going to reap the benefits this time too.

Note : I have a mixture of all 3 , JINS+CFVF+CSEC in portfolios managed by me ~ 100,000.