A value-enhancing insurance deal
■ On 22 Jun 2021, Affin announced a merger of its insurance entities with MGI
which would reduce its stake in the insurance entities from 50% to 30%.
■ This deal would lead to one-off gain of an estimated RM157.2m (32% of
FY22F net profit) and higher earnings contributions from its insurance units.
■ Although we expect the above deal to be value-enhancing, we reiterate our
Reduce call on Affin due to the heightened credit risks from Covid-19.