I think you have touched on the issue: " narrowing profit margin, caused by lower interest rate spreads on annuity products was also not well received".
This is from the report:
Does this mean CGF is in a dilemma: 1. If CGF increase its pricing on its annuity to offset increase in interest rate, it may lose some customers and sell less annuity - therefore may reduce profit. 2. If CGF reduce pricing on its annuity to attract more customers, its profit margin will be adversely effected by increase in interest rate.
What is the right balance to increase the overall profit for CGF?
Do you know what each revenue stream contribute to CGF overall profit? Does the sale of annuity the major contributor to CGF overall profit - i.e. 60%
I am just trying to understand why the market dumped this stock. Is it really an over reaction?
ps: Sorry - I cannot translate to Latin - for Latin readers.
CGF Price at posting:
$5.25 Sentiment: Hold Disclosure: Held
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