How will PTI get over the headwinds?

Overcoming Challenges in 2024

In 2024, PTI navigated through “stormy seas” with two notable events. First, PTI, along with other companies in the IPA Group ecosystem such as VNDirect (founded by Ms. Pham Minh Huong, Chairwoman, and Mr. Vu Hien), was hit by a hacker attack. This attack simultaneously paralyzed the systems of PTI and VNDirect, and IPAAM and APA also experienced system freezes. Although the issue was resolved after a few days, it took much longer for investor and customer confidence to recover. Second, the market-wide trust crisis in the insurance sector caused a slow rebound, coupled with difficulties stemming from increased payout rates in life insurance—affected by Typhoon Yagi—leading to declines in many of PTI’s core business segments.

According to PTI’s Q4 2024 financial statements, as of December 30, PTI recorded revenue of VND 3,891 billion, a drop of 20.2% from VND 4,784 billion in 2023. However, its after-tax profit rose by 28.1%, from VND 253 billion to VND 324 billion—despite a decline across core annual aggregated segments, including net revenue from insurance business activities, revenue from investment property business, and revenue from financial operations. This result was largely offset by reductions in operating expenses, lower cost of investment properties, and decreases in other expenses, financial expenses, and administrative expenses, as well as a more than fourfold gain from associates and joint ventures.

Overall, in PTI’s aggregated business activities, lower total operating expenses for the insurance segment helped improve the pre-tax profit margin. In addition, stronger gross profit also contributed to PTI’s favorable year-end results.

Laying the Groundwork for a “New Launchpad”?

Although the company posted positive earnings, the biggest highlight for PTI will only fully emerge in early 2025. After 10 years of being constrained by its charter capital limit, PTI has finally realized a decision—approved by its foreign shareholder and other shareholders—to successfully raise its charter capital. Accordingly, the company issued nearly 40.2 million shares to 8,700 existing shareholders to increase its capital from owners’ equity.

Previously, at the 2024 AGM, the major shareholder group holding more than 37% of PTI’s charter capital—and thus wielding veto power—DB Insurance, continued to reject two proposed capital-raising plans: offering shares to existing shareholders at a 1:1 ratio and issuing bonus shares at a 1:1 ratio. The foreign shareholder only agreed to the plan of issuing bonus shares at a 2:1 ratio.

DB Insurance is from South Korea and is known to have acquired two insurance companies in Vietnam: Saigon – Hanoi Insurance Corporation (BSH) and Aviation Insurance Corporation (VNI – AIC). Although DB Insurance has approved PTI’s capital increase and affirmed it will accompany the company on its development journey, the fact that it holds interests in multiple “competitors” within the same industry remains a concern for many of PTI’s smaller shareholders. Moreover, investors are closely monitoring both the advantages and potential risks associated with having a controlling stake within the same IPA Group ecosystem.

Overall, forecasts for 2025 suggest that, thanks to positive business results, the capital increase, and improving financial efficiency metrics—with EPS exceeding VND 4,000 per share and ROE above 10%—PTI is expected to regain market share among the top five non-life insurers with the highest premium revenue. This would reverse the gradual decline in its market share over the past three years, which fell from 9.02% in 2022 to 5.05% in 2024.

Regarding investment recommendations on non-life insurance stocks, including PTI, MASVN notes that the group currently has a low P/B ratio. It will likely need additional time to achieve higher valuations, predicated on a medium-term recovery and growth outlook.