The management of TPL Corp held an analyst briefing on 8th Mar’20 to discuss the financial results of 1HFY21 and future outlook. The management covered all the subsidiaries of the group company in their briefing.
Brief Takeaways
· TPL posted a consolidated loss of PKR 656mn in 1HFY21 against a loss of PKR 494mn in SPLY. The revenue of the company climbed up by 6% YoY, settling at PKR 2,701mn in 1HFY21. The uptick in topline was attributable to a growth in TPL Trakker and TPL Life revenue by 15% and 28% YoY, respectively.
· In the TPL Insurance Business, the company informed that it is focusing more on B2B segments. Furthermore, the company has launched TPL Insurance Mobile Lifestyle App followed by Whatsapp based insurance service in order to bundle insurance as a life-style product. According to the company, there was good traction in terms of volumes in this business and around 30K-40K transactions are now being witnessed in a month. Moreover, the claim ratio has increased from health business, which is now higher than from the auto segment. The company expects to increase overall market share to 6% by 2025 from 2.7% currently (23% CAGR). Property (38%) and Motor (26%) account for most of the business.
· In the TPL Properties business, the Centrepoint building sale transaction is expected to be completed by 31st Mar’21. Meanwhile, for the company’s One Hoshang project (a residential apartment tower), land has been acquired and after architectural approval, work on the project will commence (estimated project cost of PKR 6-7bn). Other than this, the company is also working on the Technology Park Project, which includes three connected towers, catering to IT companies (estimated cost of PKR 7-8bn). While, Master Housing Project’s MoU will be signed during this week, which will take ~11 years to complete.
· TPL Trakker business has witnessed a run rate of PKR 50mn during 6 months in terms of revenue due to surge in demand. At present the company is licensing Maps Data to third parties such as Telenor, Bykea, B4U Cabs, Foodpanda, Jazz and Eat Mubarak. Moreover, the company is engaged in partnering with companies which have geo coding available but cannot monetize it. Furthermore, the company is giving Tracking service to PSO and K-Electric. Additionally, TPLT has launched Trakker Pro Service. However, due to COVID-19 the company’s container tracking business got affected (revenue down 16% YoY during 1HFY21). During 1HFY21, the company incurred impairment loss (PKR 15.4mn) recognized on acquisition of management control of Trakker Middle East. Regarding question of whether the company will be a Shariah Compliant in future or not, the company’s TPL Trakker Management said that the company has Sukuk instruments on its books and is slowly reducing its other debt in order to meet the criteria. The company is in touch with MG, Master Motors and Proton for Android Based Infotainment Navigation System. At present there are 130,000 active cars with TPL Trakker. In the Connect Car segment of TPL Trakker, the company expects surge in revenue from PKR 12-13mn a month to PKR 20-25mn month. This is expected on the back of new OEMs coming into the market. The company aims to make the TPL Maps app as the “National Maps App of Pakistan”.
· For Life Insurance industry, the company believes that it is a market which is under-served and has a huge potential. TPL Life is offering usage-based insurance, which could be turned on and off according to the customer’s need. Also the company is the first Pakistani company to provide COVID-19 Protection Shield. Furthermore, in order to cater to the lower income segments the company is offering insurance scratch cards which can be availed for as low as PKR 375. For 2021, the company plans to launch Rehbar digital platform, where paperless products can be sold. The company’s five year plan consists of introducing Digital Life Insurance Plan, AI Based underwriting via facial recognition, paperless technology, tech-based agent appointments, mobile-based preemptive health care solutions, tech-based fastest qualitative blood testing, and integration of wearable devices. Moreover, TPL Life’s 36.6% stake is being acquired by AF LP (UK based company).
· During 1HFY21 TPL e-Ventures have scrutinized startups aimed at Digital Banking, Telehealth, E-Logistics and E-commerce. Moreover, the company’s Tellotalk app’s user base has jumped up by 50% in last six months. The company’s Rider business has seen healthy volumetric growth, as delivery services have increase due to COVID-19. While, company’s KarloCompare website is undergoing due diligence process.
Courtesy – AHL Research