Prudential Plc: Lowering our forecasts for Chinese subsidiary and Hong Kong sales update

研报英文原文证据摘录

Prudential Plc: Lowering our forecasts for Chinese subsidiary and Hong Kong sales update

Farooq Hanif AC Europe Equity Research

(44 207) 742-8091 30 July 2026 C A Z E N O V E

farooq.hanif@jpmorgan.com

Price Performance Summary Investment Thesis and Valuation

Investment Thesis

We expect attractive new business growth consistent with

management’s 2022-27 15-20% new business profit growth

target, with greater stability in reported margins under the new

Traditional Embedded Value (TEV) methodology. This should

be supported by a recovery in China and agent recruitment, an

improvement in agent productivity and further measures to

improve the mix of higher margin product sales (e.g. health and

protection). Our analysis also highlights that Pru is set to achieve

strong growth in operating cash flow, attaining its >US$4.4bn

YTD 1m 3m 12m operating gross free surplus generation target by 2027E. We like

Abs -4.2% 9.9% -0.5% 16.4% the clarity of Prudential’s capital management targets, based on

Rel -13.3% 8.7% -7.9% -1.0%

a 175-200% free surplus ratio capital range, and this points to a

Company Data closer link between net free surplus generation and capital

Shares O/S (mn) 2,750 returns in future years. Prudential intends to conduct recurring

52-week range (p) 1,238-910 buybacks, with $500m and $600m announced at 1H25 results

Market cap ($ mn) 40,331.42

Exchange rate 74.79 for 2026E and 2027E, respectively. The recent sale of part of its

Free float (%) 100.0% stake in IPAMC in India is positive for valuation, and should lead

3M ADV (mn) 5.90 to total buybacks of $1.2bn and $1.3bn in 2026E and 2027E,

3M ADV ($ mn) 82.7

Volatility (90 Day) 32 respectively.

Index MSCI Europe

ValuationBBG ANR (Buy | Hold | Sell) 19|0|0

Our Dec-27 1,480p price target on Prudential represents ~1.1x