KUALA LUMPUR (March 21): Affin Hwang Capital Research has initiated coverage on Syarikat Takaful Malaysia Keluarge (STMK) at RM4.48 with a “Buy” rating and target price of RM8.30 and said STMK will likely deliver robust ROEs of 32-33% over 2019E-21E on the back of sale of credit-related products (which have a relatively low claims ratio), increasing market awareness of Takaful products, growth of Islamic banking and electronic intiatives.

In a note today, the research house said a low capex requirement also suggests the potential for special dividend payments ahead.

“We initiate coverage on STMK with a Buy rating and a target price of RM8.30 (at a 5.6x P/BV target),” it said.