The advent of COVID-19 opened an opportunity for TQM to dramatically expand sales of healthcare products—largely coronavirus-related. We expect further sales of these types of policies through 2H20. The firm also plans to acquire more insurance brokers during 2H20 in order to augment sales growth (not factored into our model). We will attend the analyst meeting next week before reviewing our valuation or earnings forecast. TQM’s strong business and profit growth profile justifies a BUY rating.
Earnings were 5% above our estimate
TQM posted a 2Q20 net profit of Bt163m, up 33% YoY but down 9% QoQ. The result was 5% above our estimate, due mainly to a fatter GM than assumed (we had modeled for 49.5%; the company reported 50.4%). 2Q20 earnings made for 1H20 NPAT of Bt342m, up 49% YoY and equal to 47% of our 2020 projection.