Kurnia Asia will announce its 1QFY11 results on 25th May, Wednesday. We expect the group will be able to deliver a decent set of results given the lower claims ratio and stable investment income. Thus, we are upgrading our FY11 and FY12 earnings by 14.8% and 33.8% respectively. In line with a sector rerating as motor premium hikes are upcoming together with news of M&As in the industry, we apply a higher industry average PE of 15x and derive a fair value of RM0.42. Upgrade to Neutral.
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