Kudos Madamswer on the your take of CGF!! You've gained a new...

Kudos Madamswer on the your take of CGF!! You've gained a new follower.

This is a very clear description, well done for educating!!!!
Sorry, i'm only catching up to HC posts now hence the "late" response to the 3Q and your comments - do note however, you have some great insights on CGF previously and appear to understand well, the company. I'm just piggybacking off your comment, thought it was really insightful.

For CGF to provide a "small" update in FY24, with 3 months left to go in the FY is also something to be considered. And not only just for the period of FY24, but rolling into FY25,26,27 as well. Just one for all to think about, when dealing with future earnings upgrades.

ASX/market values CGF on a relative basis using P/B, and due to its operations of "deposit taking" for a "fee" - almost like a term deposit operator, the banks are its best counterparts to measure against. Well, more so than general insurers anyways.. So, CGF had often been marginalised from a valuation perspective on the ASX, especially when compared to the big4 banks in the decade prior of lower rate for longer. Hence, their P/B have traditionally been at a discount to the banks.

Now though, youve got 1) stronger relative "growth", 2) expanding life book, 3) higher investment income in both policy and shareholder fund, 4) ageing demographic theme that is in play - stronger than ever before (think of the age breakdown of australia, and cohort moving into the 65yo bracket), and 5) retail annuity demand on longer tenure. Sure theres more factors, but these are the ones i'm focusing my time on anyways.

why "growth" rather than growth? Simple. No one can forecast annuity revenue for CGF well, too many factors involved like - new customer growth, annuity duration sold, reinvesments from maturities, rate sold. The drivers are too opaque, i dont even bother. What i do know however, is these drivers are more "tailwinded" today than "headwinded". Consensus would likely be more pessimistic, given that the low-rate decade preceding this had reinforced that line of thinking.

And relative growth? No banks are perpetuating double digit growth. And on top of that, they are faced with margin compression on cost of funding (NIM), flat to little book growth, rising asset quality concerns, etc etc etc. Yet, CBA is still at 3x P/B, NAB and WBC at 1.7x P/B, ANZ at 1.3x, and CGF at 1.4x?