External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Prudential unveiled the long-awaited capital management update of US$2.0bn share buyback plan which will be completed no later than mid-2026, in addition to the annual dividend growth of 7%-9% in FY24E, as announced at year start.</li><li>The first tranche of US$700mn buyback will operate from 24 Jun 2024 to no later than 27 Dec 2024 throughout 2H24.</li><li>Under our estimates, this would reduce the company’s ordinary shares by c.78mn in FY24E, and c.224mn in total to 2,530mn shares outstanding by mid-2026, not taking into account of other buybacks, if any, relevant to employee and agent share schemes and/or scrip dividends in future. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Prudential unveiled the long-awaited capital management update of US$2.0bn share buyback plan which will be completed no later than mid-2026, in addition to the annual dividend growth of 7%-9% in FY24E, as announced at year start.The first tranche of US$700mn buyback will operate from 24 Jun 2024 to no later than 27 Dec 2024 throughout 2H24.Under our estimates, this would reduce the company’s ordinary shares by c.78mn in FY24E, and c.224mn in total to 2,530mn shares outstanding by mid-2026, not taking into account of other buybacks, if any, relevant to employee and agent share schemes and/or scrip dividends in future. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Prudential Plc. (2378 HK) - US$2bn Share Buybacks Brace for Sustainable Shareholders Return

Fintech & EM-focused Analyst, KT Capital Group

Alec Tseung

Fintech & EM-focused Analyst

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

<ul>
<li>Given Pru's demerger in 2021, it now offers investors a good alternative to AIA to tap into the development and the growth potential of the life insurance sector in Pan-Asia.</li>
<li>AIA has a more balanced business across so many markets in APAC, while Pru skews toward Southeast Asia.</li>
<li>Pru's P/BV is currently at a 30% discount to AIA's and is trading at the same level as the year-end when China just announced the re-opening of its borders.</li>
</ul>


Given Pru's demerger in 2021, it now offers investors a good alternative to AIA to tap into the development and the growth potential of the life insurance sector in Pan-Asia.
AIA has a more balanced business across so many markets in APAC, while Pru skews toward Southeast Asia.
Pru's P/BV is currently at a 30% discount to AIA's and is trading at the same level as the year-end when China just announced the re-opening of its borders.


APAC Insurers Series (#2): AIA or Prudential?

<ul><li>Prudential reported strong FY23 results with new business profit (NBP) jumping by 45% YoY (CER) to US$3.13bn, beating consensus by 6.4%, thanks to +3ppt NBP margin expansion to 53% in full year.</li><li>The Group’s NBP margin (NBM) sequentially improved in 2H23 to 57% from 49% in 1H23, driven by a trend of margin recovery in 2H in almost all key markets, except the mainland JV CPL, whose NBP fell by 70% YoY in 2H23, adversely affected by tanked bancassurance sales and unfavourable economic sentiment that dragged down demand for protections.</li><li>Hong Kong sustained strong momentum into 4Q23 with NBP up by 3.3x YoY in 2H23, reflecting its market-first position for mainland Chinese visitors (MCVs). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Prudential reported strong FY23 results with new business profit (NBP) jumping by 45% YoY (CER) to US$3.13bn, beating consensus by 6.4%, thanks to +3ppt NBP margin expansion to 53% in full year.The Group’s NBP margin (NBM) sequentially improved in 2H23 to 57% from 49% in 1H23, driven by a trend of margin recovery in 2H in almost all key markets, except the mainland JV CPL, whose NBP fell by 70% YoY in 2H23, adversely affected by tanked bancassurance sales and unfavourable economic sentiment that dragged down demand for protections.Hong Kong sustained strong momentum into 4Q23 with NBP up by 3.3x YoY in 2H23, reflecting its market-first position for mainland Chinese visitors (MCVs). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Prudential Plc. (2378 HK) - NBP Beat Driven by Better 2H Margin

<ul>
<li>PICC P&amp;C's Q3 underwriting profitability deteriorated due to typhoon/catastrophe-related losses in both motor and non-motor business.</li>
<li>Samsung Life's new business growth momentum continued in Q3'23; new business CSM margin slightly improved QoQ.</li>
<li>Prudential disclosed limited details in its Q3 results but we can see the growth trend of new business volume and profits continuing in the quarter.</li>
</ul>


PICC P&amp;C's Q3 underwriting profitability deteriorated due to typhoon/catastrophe-related losses in both motor and non-motor business.
Samsung Life's new business growth momentum continued in Q3'23; new business CSM margin slightly improved QoQ.
Prudential disclosed limited details in its Q3 results but we can see the growth trend of new business volume and profits continuing in the quarter.


APAC Insurers Series (#4): How We See the 3 Insurance Stocks in 2024

<ul>
<li>Pru is currently trading below its embedded value, with the valuation assigning a negative value for the group’s new business profits.</li>
<li>Given its quality franchise across all key markets in Asia and continued strong new business recovery (to pre-Covid levels), this doesn’t seem to make sense at all.</li>
<li>We would continue underwriting the investment case of Pru in the coming year, with the stock offering significant upside potential. </li>
</ul>


Pru is currently trading below its embedded value, with the valuation assigning a negative value for the group’s new business profits.
Given its quality franchise across all key markets in Asia and continued strong new business recovery (to pre-Covid levels), this doesn’t seem to make sense at all.
We would continue underwriting the investment case of Pru in the coming year, with the stock offering significant upside potential. 


2024 High Conviction: Underwriting Prudential’s Investment Case into 2024

Hong Kong

Prudential Public Limited Company provides long term savings and protection products. The Company offers life and health insurance for long term business including asset management services. Prudential serves customers in Asia and Africa.

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Prudential (2378 HK)

APAC Insurers Series (#2): AIA or Prudential?

Pru’s recent correction offers investors an opportune window to buy into its premium franchise (vs. AIA), although both stocks provide investors...

Alec Tseung

Prudential Plc. (2378 HK) - NBP Beat Driven by Better 2H Margin

Prudential reported strong FY23 results with new business profit (NBP) jumping by 45% YoY (CER) to US$3.13bn, beating consensus by 6.4%, thanks to...

CMB International

APAC Insurers Series (#4): How We See the 3 Insurance Stocks in 2024

While we see limited upside in both PICC P&C and Samsung Life, we believe Prudential is the only one out of the three insurance stocks we...

Alec Tseung

2024 High Conviction: Underwriting Prudential’s Investment Case into 2024

We continue underwriting Pru’s investment case into 2024, with the market now assigning a negative new business multiple. Any modest improvement in...

Alec Tseung

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