Great Eastern’s profit surged 30% to $878.6m in FY14

Thanks to higher profits from its insurance segment.

Great Eastern’s net profit surged to $878.6m in FY14, an increase of 30% from the $674.8m that the group raked in last year.

Core profit from the insurance business grew 6% to $591m, primarily driven by better performance from its investment-linked fund in Malaysia.

The group capped off a record year with a strong showing in the fourth quarter. Great Eastern’s net profit increased 25% year-on-year to $207.8m in Q4, boosted by growth in operating profit from its insurance business as well as unrealised marked-to-market gains.

According to OSK DMG, Great Eastern’s outlook remains positive because of its dominant insurance franchise in Singapore and Malaysia. The group is also poised to make further inroads into the Greater China market with the acquisition of Wing Hang by parent OCBC.

“Despite the recent re-rating, valuation for the stock remains undemanding at 1.1x P/EV. Since last year, GE has began to separate out its investment income performance from its under-writing business, and with this, investors are now able to peg a more appropriate multiple for the stable and long-tail insurance business,” stated OSK DMG.