KUALA LUMPUR (Nov 18): CIMB Research has maintained its Add rating on Tune Ins Holdings Bhd at RM2.07 with a lower target price of RM3 (from RM3.05) and said Tune’s 9MFY14 net profit was below expectations at 64% of house full-year forecast and 65% of consensus.

In a note Nov 17, the research house said this was because it had under-projected the claims ratio.

“Hence, we raise the ratio from 30% to 34% for FY14.

“This leads to a drop in our FY14 EPS forecasts and DDM-based target price (COE of 9.2%; LT growth of 5%). However, our FY15-16 numbers are unchanged,” it said.

CIMB Research said despite the weaker-than-expected 9M results, it was  unwavering on its Add recommendation on Tune, as the potential re-rating catalysts were intact, including 1) the swift expansion of its travel insurance business in the region, with the new market in the Middle East, 2) the growth prospects in the non-life insurance market in Thailand and 3) more tie-ups with other airlines.  

At 9.13am, Tune fell 0.97% or two sen to RM2.05 with 3,000 shares done.