International General Insurance Holdings Ltd.

IGIC Details

International General Insurance Holdings Ltd. (NYSE: IGIC) is committed to provide specialty lines insurance and reinsurance solutions to its client’s complex risks. The Company is focused on underwriting expertise, flexibility in responding to customer needs, and ensuring efficient and responsive claims handling, all done by stable management.                                                                                                               

Q3FY21 Results:

• Increased Topline Numbers: The company has posted total revenue of USD 95.90 million for Q3 2021 vs USD 75.40 million in Q3 2020, increased by 27.18%.
• Robust Increase in Bottom-Line: Net income in Q3 2021 has significantly increased by 69.47% to USD 16.10 million vs USD 9.5 million, due to increase in revenue and stabilized operating expenses.
• Lower Investment Ratio: The company has investment ratio of 4.9% in Q3 2021 as compared to Industry median of 9.7% which is comparatively lower.
• Cash, Total Assets and Liabilities Position: As of September 30, 2021, the company's cash and cash equivalent stood at USD 224.4 million, with a total Assets of USD 1,392.8 million and total liabilities of USD 997.3 million.

Key Risks:

• Assessment Risk for Underlying Exposure: The company is prone to underwriting risk for underlying exposures and risk selection can also become adverse. The company will also maintain its active cycle management balancing growth factors also macro factors which includes COVID restrictions and manpower shortage.

Outlook:

• FY22 Estimates: IGIC’s total revenue is expected to go up by 10.69% to USD 587.7 million on YoY basis in FY22, with an expected Earnings per share of 1.075 and book value per share 9.53.
  

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation

Source: Analysis by Kalkine Group

IGIC Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

IGIC’s share price has increased by 11.56% % in the past nine months and is currently leaning towards the lower end of its 52-week range of USD 11.05 to USD 6.75. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 74.04. We have valued the stock using the Price to Book value per share based relative valuation methodology and arrived at a target price of USD 9.15.

Considering the significant correction in the stock price, strong revenue track record, steady dividend yield, investment ratio, associated risks, and current valuation, we recommend a "Spec Buy" rating on the stock at the closing price of USD 7.91, down 0.126% as of January 12, 2022.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

* Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.