📂 Mongolian Insurance database | $475M surplus | APU earnings Q2 2023

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In today’s edition:

• Insurance sector's new database

• Balance of Payment update

• Earnings: APU

Let’s dive in!

📂 Mongolia: A Blockchain-Based Auto Insurance Data Sharing Scheme

The Insurance Association of Mongolia and TEO blockchain has recently unveiled the "Insurance Database," a cutting-edge solution that brings substantial advancements to the industry.

Previously, the absence of a voluntary insurance data exchange similar to the credit databases used by banks led to numerous challenges within the insurance sector. Competitors struggled to reach a consensus, leading to duplicate insurance coverage, and in some cases, different companies would provide compensation for the same loss.

This issue was particularly evident in the domain of vehicle insurance, where a single damage event could trigger double compensation from both "Vehicle Insurance" and the "Compulsory Driver's Liability Insurance Agreement." However, a solution is now at hand, leveraging a decentralized private blockchain technology system.

• How it works: All data relevant to the insurance industry, encompassing transactions and claims, will be meticulously recorded in a secure chain. In real-time, records from one insurance company will seamlessly integrate with the blockchain records of other insurance companies, ensuring the integrity of information without the possibility of alteration by the receiving party.

• Change: Integrating a blockchain-based insurance database not only streamlines the insurance process but also enhances transparency and security, automating key aspects of the industry.

• Beneficial for policyholders: With the establishment of this insurance database, the challenges of the past, which necessitated strict requirements for new customers due to the absence of a centralized data repository, will be overcome. Leveraging the comprehensive customer information within the database, it becomes feasible to enhance insurance conditions and reduce prices for policyholders.

In essence, the introduction of insurance databases capitalizes on the decentralized and unalterable nature of blockchain technology, creating an efficient mechanism for managing insurance policies and claims. Furthermore, this development is expected to foster increased collaboration among insurance companies, intermediaries, and government agencies, leading to a more interconnected and effective insurance ecosystem.

DATA STORY: Balance of payments, Q2 2023

The balance of payments for the first half of this year revealed a remarkable surplus of $474.9 million, setting a historical milestone as the highest surplus ever recorded.

The most significant loss, totaling $1.1 billion, was encountered in the initial half of 2022, while the most substantial surplus is achieved this year.

🔻 APU’s profit decreases 12.7% in the H1 2023

APU (APU), one of the TOP 10 companies with the most number of shareholders in Mongolia, made a profit of ₮71.7 billion in the first half.

• In a nutshell: APU sold 86 million liters of 371 types of products, earned ₮518 billion, paid ₮200 billion in taxes, and made a profit of ₮71.7 billion.

• Dividend: APU has recently announced its distribution of ₮45 per share from its half-year profits, scheduled to take place within the current year.

Let's turn to the financials:

The company made a profit of ₮71.7 billion in the first half, which is a 12.7% decrease from a year ago. This is because,

• Income & Expense: APU's sales income increased by 32.4% to ₮517.9 billion due to the growth of milk products and export sales. However, the profit decreased as the cost of sales increased by 44.6% and operating expenses also increased by 65.2% respectively.

• Margin: As a result, the operating margin of the company decreased by 10 percentage points to 17%, and the net profit margin decreased by 7 percentage points to 14%.

• Ratio: Also, their average ROE fell to 10.9% from 13% a year ago. And the P/B ratio was 2.1 as of the 4th of August.

Business activity

This year, APU started the operation of a subsidiary company in China in order to increase its share in the international market, especially to increase its sales in Asia. Consequently, they have started re-supplying the Sengur brand in China. Moreover,

• 🇧🇬: APU Dairy has signed a cooperation agreement with Bulgaria.

• 🇰🇿: Signed an export contract with Kazakhstan.

• 🇷🇺: The Genghis Khan brand has started to be sold in Moscow and St. Petersburg, Russia.

So, APU's performance in the first half of this year has been mixed.

🏃 QUICK STORIES

🔵 The Boeing 787-9 Dreamliner aircraft named "Khubilai Khan" will commence flights to the United States in Q2 2024. In May 2023, MIAT concluded a long-term agreement with AerCap for an operating lease of two 787-9 Dreamliner aircraft. The aircraft will have a total of 292 seats, with 30 in business class, 36 in premium economy, and 226 in economy class.

🔵 Shannon Cowlin appoints as ADB's country director in Mongolia. Ms.Cowlin has over 24 years of professional experience, including more than 10 years in ADB. She has been leading energy and multi-disciplinary climate change dialogue and projects. Moreover, she will oversee ADB’s operations in Mongolia, including the implementation of the country's partnership strategy for inclusive and sustainable growth.

🔵 MICC suggests BUY recommendation, with an upside variation of 63.25%, on the Tumen Shuvuut (TUM). According to the MICC’s estimation, the company's production capacity will increase by 160 million eggs per year due to the "Tumen Poultry 2" project, and its income will increase by ₮32 billion. Read HERE for more.

🔵 In the first 7 months of this year, the foreign trade surplus reaches $3.7 billion. During this period, the export volume increased by 34.5% and reached $8.7 billion, the foreign trade balance increased by 2.2 times. Also, Mongolia has exported goods to 67 countries.

🔵 XacBank (XAC) will hold an extraordinary meeting of shareholders on September 15. In addition, the list of shareholders who will participate in the meeting will be finalized on August 23. The meeting will discuss the operational and financial report of the bank for the first half of 2023, as well as information on the selection process for an independent member of the board of directors.

⭐ TOP NEWS

• U.S. 2023 Investment Climate Statements of Mongolia. (U.S.DepartmetofState)

• The best ways to get around in Mongolia. (LonelyPlanet)

• Direct flights between Bangkok and Ulaanbaatar now available. (TD)

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Editor: E.Zolbayar
Writer: M.Khulan & Skh.Angirmaa

Disclaimer: The information Inside Mongolia provides is for educational and informational purposes only. It is not intended to be and does not constitute financial advice, trading advice, or any other advice. The decision whether to consider the information we provide is solely our readers' independent decision.