Financial Performance - New business profit increased by 11% to $3.078 billion, with traditional embedded value new business profit also growing by 11%[7] - Adjusted profit before tax rose by 10% to $3.129 billion, while adjusted profit after tax increased by 7% to $2.582 billion[7] - Total dividend for 2024 increased by 13% to $0.2313 per share, with total shareholder return for the year amounting to $1.4 billion[7] - Adjusted operating profit for 2024 reached $3,129 million, an 8% increase year-on-year, while adjusted net operating profit after tax was $2,582 million, reflecting a 5% growth[14] - The group’s adjusted post-tax operating profit for 2024 was $2.582 billion, a 7% increase from 2023[40] - The total profit from insurance business is $3.419 billion, showing a 6% growth compared to the previous year[86] - The group’s total adjusted after-tax operating profit is $2.582 billion, a 5% increase from $2.449 billion in the previous year[84] - The total adjusted contract service margin as of December 31, 2024, was $19.2 billion, leading to an adjusted total equity of $36.7 billion, equivalent to $13.79 per share[76] Shareholder Returns - The company plans to complete a $2 billion share buyback program by the end of 2025, ahead of the original schedule[7] - A $2 billion share buyback program was announced, with $785 million already returned to shareholders by December 31, 2024[68] - The total shareholder return for 2024 included dividends of $552 million and share buybacks of $785 million[109] - The estimated excess shareholder surplus over the group's capital requirements was $15.9 billion as of December 31, 2024, with a coverage ratio of 280%[41] Operational Efficiency - The company aims to enhance operational efficiency and meet customer needs through improved claims management and modernized IT infrastructure[6] - The company plans to complete the deployment of its digital service platform PRUServices across seven business units by the end of Q1 2025[9] - The company has enhanced the functionality and consistency of its digital service platform PRUServices, with deployment expected to be completed by the end of Q1 2025 across seven business units[37] - The company aims to increase new business profit from the bank insurance channel by 1.5 to 2 times by 2027, leveraging over 200 banking partners[53] Market Growth and Strategy - The Asian and African markets show clear long-term growth trends, creating significant opportunities for the company[6] - New business profit in banking and insurance increased by 31%, with health and protection products contributing 8% to annual premium equivalent sales[9] - The company is evaluating the potential listing of ICICI Prudential Asset Management Company Limited, which may involve a partial divestment of its stake[7] - The company has established a new partnership with Indonesia's largest Islamic bank, BSI, to expand its distribution network[37] Customer Engagement and Satisfaction - The company achieved a customer net promoter score in the top quartile across five markets, indicating high customer satisfaction[9] - Customer retention rate improved by 1 percentage point to 87% in 2024, with five business units reaching the first quartile in customer net promoter scores[44] - The company launched a health protection plan tailored for mainland Chinese travelers in July 2024, providing comprehensive lifelong coverage through partnerships with over 1,500 healthcare providers in mainland China[60] Risk Management - The company warns of various risks and uncertainties that may affect future financial performance, including geopolitical tensions and regulatory changes[28] - The group faces market risks from interest rates, equity prices, property prices, credit spreads, and currency fluctuations, with a moderate inflation risk primarily from rising medical supply costs[200] - The group maintains capital requirements to ensure sufficient capital above internal and regulatory economic capital requirements, aiming for an ideal credit rating[199] - The group has established procedures for employees to report unethical behavior and violations anonymously[187] Investment and Capital Management - The company plans to invest approximately $1 billion in core capabilities, focusing on customer, distribution, health business, and technology areas[107] - The group anticipates achieving a compound annual growth rate of 15% to 20% in new business profit from 2022 to 2027, with a target operating free surplus of at least $4.4 billion by 2027[74] - The company aims for a risk-adjusted internal rate of return exceeding 25% on new business investments, with a payback period of less than four years[105] Regional Performance - New business profit from health operations reached $346 million in 2024, marking an 11% increase[58] - The new business profit for Hong Kong in 2024 was $1.438 billion, reflecting a 2% increase from $1.411 billion in 2023[127] - In Indonesia, annualized premium equivalent sales decreased by 5% to $262 million, while new business profit increased by 2% to $145 million[133] - In Singapore, annual premium equivalent sales for 2024 reached $870 million, an 11% increase from $787 million in 2023[153] Technology and Innovation - Investment in technology has improved the detection and recovery rates of fraud, waste, and abuse, with a pilot program in Malaysia and Singapore showing a doubling of claims processing automation rates[62] - The company plans to replicate the AI chatbot capabilities, which validated 98% of leads in the Philippines, to Hong Kong, Malaysia, and Vietnam by 2025[54] Corporate Governance - The board expresses confidence in the group's strategy and plans to review investments in new business opportunities and capabilities[113] - The group has established a self-risk and solvency assessment process to identify, measure, manage, and report risks, ensuring capital adequacy at all times[188]

Core Viewpoint - The recent appointment of Chang Ge as Vice Chairman of CITIC Prudential Asset Management signifies a strategic leadership change within the company, following his prior roles in CITIC Prudential Life Insurance and various positions in the financial sector [1][2]. Group 1: Company Governance - CITIC Prudential Asset Management has updated its governance information, confirming Chang Ge's new role as Vice Chairman [1]. - The financial regulatory authority approved Chang Ge's qualifications for the board position on October 23 [1]. - Chang Ge was previously appointed as General Manager of CITIC Prudential Life Insurance on June 21, with subsequent approval from the financial regulatory authority [1]. Group 2: Professional Background - Chang Ge holds a senior economist title and has a PhD in Finance from the Chinese Academy of Social Sciences, along with a postdoctoral degree in Applied Economics [1][2]. - His extensive career includes leadership roles at major financial institutions, such as China Agricultural Bank and CITIC Bank, where he managed various departments [2]. - Chang Ge has participated in advanced training programs and has published research in notable financial publications, contributing to several significant reports and books [2].

Core Viewpoint - The article discusses the resilience and investment strategy of small-cap stocks, highlighting the success of the fund manager Jiang Feng from China CITIC Prudential Multi-Strategy Mixed Fund (LOF) despite the initial downturn in small-cap stocks earlier this year [1][6]. Group 1: Investment Strategy - Jiang Feng emphasizes a contrarian investment approach, suggesting that maintaining faith in a well-researched investment philosophy can yield long-term benefits [1][5]. - The PB-ROE model is a key evaluation tool for assessing stock value, where a low PB indicates potential for recovery as market conditions improve [3][4]. - Jiang Feng's dynamic management of stock positions involves increasing allocations during market downturns to capitalize on lower valuations, while being cautious during bullish phases [4][6]. Group 2: Market Conditions - The recent performance of small-cap stocks is attributed to their low valuations following earlier declines, combined with supportive government policies that have stimulated market growth [6]. - The small-cap index has shown significant recovery since September 24, driven by favorable market conditions and increased interest in mergers and acquisitions involving smaller companies [6]. Group 3: Historical Context - Jiang Feng's interest in small-cap stocks began during his academic studies, influenced by the Fama-French three-factor model, which posits that small-cap stocks generally offer higher average returns [1][2]. - Historical data indicates that the micro-cap index has experienced substantial growth over the past decade, reinforcing the effectiveness of a contrarian investment strategy [1][5].

Group 1 - China CITIC Financial Holdings and Prudential Group will each inject an additional RMB 1.25 billion into CITIC Prudential Life Insurance, increasing its registered capital from RMB 4.86 billion to RMB 7.36 billion [1] - The total capital contribution from CITIC Financial Holdings and Prudential Group will be RMB 3.68 billion each, maintaining their respective 50% ownership stakes in the company [1] - The previous capital increase was approved by the National Financial Regulatory Administration in February, raising the registered capital from RMB 2.36 billion to RMB 4.86 billion within less than a year [1] Group 2 - The third-quarter solvency report indicates that CITIC Prudential Life achieved a net profit of RMB 240 million, with solvency adequacy ratios of 211.47% and 112.50%, reflecting increases of 38.3 and 25.9 percentage points respectively [2] - Insurance business revenue reached RMB 23.782 billion, showing slight growth compared to the same period in 2023, while total assets grew by 8.6% to RMB 260 billion by the end of September 2024 [2] - The company is focusing on optimizing its business structure and enhancing channel development, with a shift towards long-term and high-value products, resulting in a 22% year-on-year increase in new business value [3] Group 3 - The company aims to align with the new national policies promoting specialized and characteristic development for small and medium-sized insurance companies, contributing to high-quality growth in the insurance sector [3] - The increase in the proportion of participating and health insurance products reflects the company's strategic shift in product layout [3]

Financial Performance - For the first half of 2024, Prudential plc reported a 6% increase in annualized premium equivalent sales to $3.111 billion, with new business profit (excluding economic impacts) rising by 8%[9]. - The new business profit, accounting for economic factors, increased by 1% to $1.468 billion, reflecting strong performance in 2023 with a 45% growth in new business profit for the full year[9]. - Adjusted operating profit for the first half of 2024 was $1.544 billion, a 9% increase from 2023, while IFRS net profit after tax was $182 million[15]. - The total profit attributable to shareholders for the period is $182 million, a decrease of 81% compared to $947 million in the same period last year[62]. - The company reported a significant drop in profit before tax attributable to shareholders, down 66% to $394 million from $1.175 billion in the previous year[62]. - The operating profit from insurance business rose to $2.486 billion, reflecting a 7% increase from $2.333 billion in the previous year[80]. - The total European embedded value shareholders' equity decreased to $43.286 billion from $45.250 billion as of December 31, 2023[81]. - The overall IFRS post-tax profit for the growth markets segment was $334 million, reflecting a decrease from $406 million in the previous year, primarily due to rising interest rates[139]. Business Strategy and Growth - Prudential plc operates in 14 Asian life insurance markets, ranking among the top three insurers in 10 of these markets, with an average of 63,000 active agents monthly[9]. - The company aims for a compound annual growth rate of 15% to 20% in new business profit by 2027, alongside double-digit growth in operating free surplus from insurance and asset management[11]. - Prudential plc's strategy is centered on providing comprehensive protection in Asia and Africa, aiming to create value for all stakeholders[7]. - The company plans to deploy a consistent customer communication platform across seven business units within the next 12 months to enhance customer interaction and support new business development[22]. - The company is focusing on high-quality recruitment for its agency business and enhancing its digital agent platform, PRUForce, to support agents with sales lead management[12]. - The company is optimistic about growth opportunities in Malaysia, Indonesia, Hong Kong, and Singapore, targeting a first quartile net promoter score level by 2027 for health products[36]. Digital Transformation and Technology - Prudential plc launched an enhanced digital service platform, PRUServices, in Malaysia and plans to expand it to nine markets within the next 12 months[12]. - Significant progress has been made in transforming the technology function, enabling the creation of a new shared capability in data, analytics, and artificial intelligence to enhance operational outcomes[37]. - The flagship agent application PRUForce is being upgraded to improve agent onboarding, performance measurement, and sales lead management, with a full suite of features expected to launch in seven markets by the end of the year[38]. - Approximately 100 AI use cases have been established across various business functions to enhance agent and customer experiences[39]. Health and Protection Products - Prudential plc is strengthening its health business by implementing strict regular repricing measures and establishing a preferred provider network in key markets[12]. - New business profit from health and protection products sold through bancassurance channels increased by 15%, contributing 8.5% to bancassurance annual premium equivalent sales[28]. - The company is facing high levels of medical cost inflation in markets like Indonesia and Malaysia, and is taking measures to renegotiate contracts with healthcare partners to improve efficiency in medical insurance claims costs[32]. - The new health business operating model will be launched in April 2024, aiming to enhance accountability and collaboration across markets, with a focus on improving efficiency in health and life insurance operations[32]. Customer Engagement and Retention - Customer retention rate remained stable at 93% in the first half of 2024, with positive trends in customer experience metrics[18]. - 95% of new business policies were submitted electronically, with 75% using electronic payment and 75% processed through automated underwriting[21]. - 59% of annualized premium equivalent sales in the first half of 2024 came from new customers, indicating effective customer acquisition strategies[22]. Capital Management and Financial Stability - The group's estimated shareholder surplus above capital requirements was $15.2 billion as of June 30, 2024, with a coverage ratio of 282%[16]. - The company maintains a robust capital position while executing its strategy with operational and financial discipline[7]. - The capital position remains strong, with a $2 billion share buyback plan announced in June[51]. - The leverage ratio was reported at 14%, consistent with the company's AA financial strength target[57]. - The estimated surplus of group regulatory capital over the specified capital requirement is $18.7 billion, with a coverage ratio of 192% as of June 30, 2024[99]. Market Performance and Challenges - Annualized premium equivalent sales in Hong Kong decreased by 7% compared to the previous period, but overall sales for the year increased by 276% compared to the previous year[13]. - The average number of active agents decreased by 8% in the first half of 2024, primarily due to regulatory changes in Indonesia and competitive recruitment challenges in the Philippines[24]. - The company is actively taking measures to control medical inflation in Malaysia, which is facing significant challenges due to rising healthcare costs and increasing claims[129]. - The macroeconomic environment remains uncertain, with potential challenges from central banks maintaining tight monetary policies to curb inflation, which could pressure economic growth[191]. Risk Management - Prudential's risk management framework emphasizes comprehensive risk governance, ensuring alignment with regulatory requirements and stakeholder interests[161]. - The group has established a robust risk management framework that emphasizes long-term goals and sustainable development, avoiding excessive risk-taking[167]. - The liquidity coverage ratio is used to measure the adequacy of cash resources to meet financial obligations under stressed scenarios[34]. - The group faces significant risks including market risks from global economic and geopolitical conditions, which may directly impact financial performance[186].

Financial Performance - New business profit reached $1.468 billion, with an 8% (6%) increase excluding interest rate and other economic impacts[3] - Adjusted operating profit increased by 9% (6%) to $1.544 billion[3] - First interim dividend per share increased by 9% to 6.84 cents (2023: 6.26 cents)[3] - Share buyback program of $2 billion initiated, with $192 million used to repurchase 22 million shares as of August 22, 2024[3] - European Embedded Value (EEV) shareholder equity per share stood at 1,575 cents (December 31, 2023: 1,643 cents)[3] - Free surplus ratio was 232% (December 31, 2023: 242%), with a regulatory capital surplus of $15.2 billion, representing a coverage ratio of 282% (December 31, 2023: 295%)[3] - Prudential aims for a 15% to 20% compound annual growth rate in new business profit from 2022 to 2027[4] - Bank insurance new business profit grew by 28% in H1 2024, excluding interest rate and other economic impacts, with strong performance in Hong Kong, Malaysia, Singapore, Taiwan, and Thailand[5] - Prudential expects new business profit growth in 2024 to align with the annual growth rate required to achieve its 2022-2027 targets[6] - EEV shareholder equity totaled $43.3 billion as of June 30, 2024 (December 31, 2023: $45.3 billion)[7] - Prudential's 2024 first half new business profit calculated using economic indicators as of June 30, 2023, and average exchange rates for the first six months of 2024, excluding economic impacts and changes[8] - Prudential aims for a 15% to 20% compound annual growth rate in new business profit from 2022 to 2027[14] - Prudential targets double-digit compound annual growth in operating free surplus from in-force insurance and asset management businesses by 2027[14] - Full-year new business profit for 2023 increased by 45% (47% excluding interest rate and other economic impacts), reflecting strong performance[15] - Annual Premium Equivalent (APE) sales for the first half of 2024 increased by 6% to $3.111 billion, with new business profit (excluding economic impacts) rising by 8%[15] - New business profit for the first half of 2024 increased by 1% to $1.468 billion when including economic impacts[15] - Bancassurance new business profit increased by 20% to $465 million in the first half of 2024, driven by APE sales growth in Taiwan, Hong Kong, and Singapore[17] - Adjusted IFRS operating profit for the first half of 2024 was $1.544 billion, a 9% increase compared to 2023[18] - IFRS post-tax profit for the first half of 2024 was $182 million, reflecting growth in operating profit offset by short-term market volatility driven by regional interest rate changes[18] - The company's shareholder surplus as of June 30, 2024, is estimated at $15.2 billion, with a coverage ratio of 282%[19] - A $2 billion share buyback program was announced, with the first $700 million to be completed by December 27, 2024[19] - The free surplus ratio as of June 30, 2024, is 232%, above the target range of 175%-200%[19] - Adjusted operating profit rose 6% to $1.544 billion in H1 2024 compared to H1 2023[49] - The company maintains its 2027 target of achieving $4.4 billion in operating free surplus from in-force insurance and asset management business[46] - Adjusted operating profit increased by 9% to $1.544 billion, driven by a 6% increase in long-term insurance business profit and an 8% increase in asset management business profit[50] - Earnings per share based on adjusted operating profit (after tax and non-controlling interests) was 43.8 cents, compared to 44.1 cents in 2023[51] - Risk adjustment release increased by 20% to $128 million, reflecting the expiration of non-market risks during the period[52] - Experience variance improved significantly to $(30) million from $(92) million in 2023, primarily due to better claims and expense management[53] - Net investment performance increased by 5% to $641 million, driven by long-term returns on equity and capital assets[53] - Contractual service margin (CSM) grew by $1.213 billion due to profitable new business, contributing to a total CSM increase of $2.031 billion[56] - CSM release to the income statement was $(1.097) billion, reflecting the gradual recognition of profits from insurance contracts[56] - The company's CSM growth rate was 4% excluding economic variances and currency impacts, demonstrating strong future profit potential[56] - Central costs (excluding restructuring and IFRS 17 implementation costs) decreased by 11% in the first half of 2024, reflecting ongoing control of headquarters costs and financial costs, with increased investment income from the group treasury balance[57] - Restructuring costs amounted to $98 million in the first half of 2024, reflecting costs to enhance back-office efficiency and improve operational models, partially offset by declining IFRS 17 implementation costs[57] - Non-operating items included a short-term investment return volatility loss of $1.081 billion in 2024, primarily due to interest rate declines in mainland China and rate increases in Singapore and Hong Kong[58] - The effective tax rate on adjusted operating profit was 18% in the first half of 2024, up from 15% in 2023, due to the recognition of a deferred tax asset related to past UK tax losses in 2023[59] - Group IFRS shareholders' equity decreased to $16.171 billion as of June 30, 2024, from $17.823 billion at the end of 2023, mainly due to dividend payments, share buybacks, and exchange rate fluctuations[60] - Adjusted IFRS shareholders' equity stood at $34.682 billion as of June 30, 2024, down from $37.346 billion at the end of 2023, reflecting declines in both IFRS shareholders' equity and contract service margins[61] - New business profit in Europe was $1.468 billion in the first half of 2024, a 1% decrease year-over-year, while profit from in-force business increased by 21% to $1.018 billion[62] - Europe embedded value shareholders' equity decreased to $43.286 billion as of June 30, 2024, from $45.250 billion at the end of 2023, with a return on embedded value of 11%[63] - Group's European Embedded Value operating profit increased by 9% to $2.296 billion, driven by an 8% increase in insurance business operating profit and a 9% increase in asset management business operating profit, partially offset by an 8% increase in other net expenses[64] - Insurance business operating profit rose to $2.486 billion, with effective business profit increasing by 22% to $1.018 billion, driven by expected returns and changes in operating assumptions and experience variances[64] - Non-operating losses amounted to $(1.196) billion, primarily due to declining future investment returns caused by rising interest rates in most markets and falling interest rates in China[64] - European Embedded Value shareholders' equity decreased to $43.3 billion as of June 30, 2024, compared to $45.3 billion at the end of 2023[64] - Prudential's Greater China operations contributed 51% of the group's total earned gross premiums and 63% of new business profit in the first half of 2024[66] - The company achieved a new business profit margin of 47% in the first half of 2024, with total new business profit of $1.468 billion[65] - Prudential plans to invest approximately $1 billion in core capabilities, focusing on customer, distribution, health, and technology areas[67] - The company aims to maintain a free surplus ratio between 175% and 200%, with capital returned to shareholders if the ratio exceeds the operational range[68] - Group free surplus decreased by 4% to $1.351 billion for effective insurance and asset management businesses, reflecting initial investments and transformation phases[70] - New business investment costs decreased by 9% to $368 million, with insurance and asset management operating free surplus (excluding restructuring costs) at $983 million, down 2% from 2023[71] - Group operating free surplus net decreased by 6% to $651 million after accounting for central costs and IFRS 17 implementation costs[71] - Free surplus at the end of June 2024 was $11.589 billion, down from $12.455 billion at the beginning of the year, with a free surplus ratio of 232% (down 19 percentage points from 2023)[71] - The company expects dividend growth to align with operating free surplus growth, with a projected annual dividend increase of 7% to 9% for 2024[72] - The first interim dividend for 2024 was approved at 6.84 cents per share, up from 6.26 cents per share in 2023[72] - The company continues to explore dividend reinvestment plans and share buybacks to manage dilution effects[72] - The group's capital adequacy is determined under the Hong Kong Insurance Authority's regulatory framework, with significant participating business in Hong Kong, Singapore, and Malaysia[73] - Group capital resources totaled $38.9 billion, with shareholders' capital at $23.5 billion and policyholders' capital at $15.4 billion as of June 30, 2024[74] - Shareholders' regulatory capital surplus above prescribed requirements was $15.2 billion, with a coverage ratio of 282% as of June 30, 2024[74] - Group regulatory capital surplus above prescribed requirements was $18.7 billion, with a coverage ratio of 192% as of June 30, 2024[74] - Moody's total leverage ratio under the revised interpretation was 14% as of June 30, 2024, compared to 20% under the previous benchmark[75] - Shareholder-funded business had total borrowings of $3.9 billion as of June 30, 2024, with central cash resources of $4.0 billion[76] - The company plans to complete a $2 billion share buyback by mid-2026, utilizing central cash resources[76] - Prudential plc issued $660 million in commercial paper as of June 30, 2024, down from $699 million as of December 31, 2023[78] - Unutilized committed financing totaled $1.6 billion as of June 30, 2024, with no outstanding amounts drawn[78] - Central cash outflows were $415 million in the first half of 2024, compared to $355 million in the same period of 2023[79] - Central cash resources increased to $3.97 billion as of June 30, 2024, up 20% from $3.31 billion as of June 30, 2023[79] - Corporate cash outflows for expenses increased to $233 million in 2024 from $155 million in 2023, reflecting timing differences in cash receipts from operating subsidiaries[80] - The company utilized $60 million in cash for share repurchases in the first half of 2024, with a total of $700 million planned for the year under a $2 billion share buyback program[80] - China mainland (CITIC-Prudential Life) annual premium equivalent sales decreased by 15% to $324 million in H1 2024, while health and protection sales grew by 30% year-over-year[83][84] - CITIC-Prudential Life's new business profit declined by 30% to $115 million in H1 2024, with new business margin decreasing by 8 percentage points to 35%[83] - Adjusted operating profit for CITIC-Prudential Life increased by 25% to $197 million in H1 2024, driven by asset base expansion and reduced losses from "onerous" contracts[84] - Hong Kong annual premium equivalent sales decreased by 7% to $955 million in H1 2024, while new business profit margin improved by 3 percentage points to 68%[85] - Hong Kong's new business profit declined by 3% to $651 million in H1 2024, with adjusted operating profit decreasing by 9% to $504 million[85] - The company's IFRS post-tax loss for CITIC-Prudential Life widened to $573 million in H1 2024 from $342 million in the same period last year, primarily due to interest rate impacts[84] - Hong Kong's IFRS post-tax profit decreased by 39% to $326 million in H1 2024, reflecting challenging market conditions[85] - The company remains focused on managing its financial position to maintain sufficient resources for business continuity and liquidity needs[80] - Hong Kong business annual premium equivalent sales for the first half of 2024 were $955 million, slightly lower than the $1.029 billion in the same period last year, with over 80% of sales generated through agency and bancassurance channels[86] - Local business in Hong Kong grew by 13% year-on-year in the first half of 2024, partially offsetting the decline in sales from mainland Chinese visitors[86] - Agency sales in Hong Kong decreased by 20% year-on-year, primarily due to the mainland Chinese visitor segment, while the average monthly active agents increased by 19%[86] - Bancassurance channel annual premium equivalent sales in Hong Kong grew by 34% in the first half of 2024, with health and protection sales more than doubling year-on-year[86] - New business profit in Hong Kong for the first half of 2024 increased by 9% to $651 million, driven by an 11 percentage point increase in profit margin to 76%[87] - Indonesia's annual premium equivalent sales decreased by 25% to $107 million in the first half of 2024, with agency sales declining by 43%[88] - Indonesia's bancassurance annual premium equivalent sales grew by 33% in the first half of 2024, with new business profit margin increasing by 10 percentage points[89] - Malaysia's annual premium equivalent sales increased by 3% to $191 million in the first half of 2024, with a 10% growth at constant exchange rates[91] - Malaysia's new business profit decreased by 5% to $69 million in the first half of 2024, with a 3 percentage point decline in new business profit margin[91] - Malaysia's annual premium equivalent (APE) sales increased by 10% in the first half of 2024, driven by growth in the bancassurance channel[92] - Malaysia's bancassurance channel recorded a 14% growth in APE and a 23% increase in new business profit in the first half of 2024[92] - Singapore's APE sales grew by 17% to $450 million in the first half of 2024, with new business profit increasing by 14% to $226 million[94] - Singapore's adjusted operating profit increased by 28% to $343 million in the first half of 2024[94] - Growth markets and other regions saw a 30% increase in APE sales to $1.084 billion in the first half of 2024, with new business profit rising by 21% to $360 million[96] - Growth markets and other regions' adjusted operating profit was $362 million in the first half of 2024, reflecting strong new business growth in Taiwan[97] - Malaysia's Islamic insurance and takaful business maintained market leadership in the first half of 2024[92] - Singapore's agency channel APE sales grew by 18% in the first half of 2024, driven by increased agent recruitment and productivity[95] - Malaysia's medical market faced challenges due to double-digit medical inflation, prompting the company to implement more frequent repricing and develop innovative health solutions[92] - Singapore's bancassurance APE sales grew by 15% in the first half of 2024, supported by investment-linked products and longer-term payment plans[95] - Thailand's annual premium equivalent (APE) sales increased by 23%, driven by the launch of new products, including a global index-linked product that offers capital protection and equity investment[98] - Vietnam's APE sales declined by 33% due to market disruptions and regulatory changes, with agency channel sales down 22% and bancassurance sales down 59%[99] - Philippines' market share stood at 14%, leading the market, despite a 21% decline in APE sales, with a focus on improving new business quality and an 8-percentage-point increase in profit margin[100] - India's APE sales grew by 17% in the first half of 2024, driven by diversified growth across channels and product categories, despite a high base effect from 2023[101] - Taiwan's APE sales surged by 75% in the first half of 2024, driven by strong demand for participating products and expansion of bancassurance partnerships[103] - Africa's APE sales grew by 16% year-on-year in the first half of 2024, with double-digit growth in both agency and bancassurance channels[104] - Eastspring's total funds under management reached $247.4 billion, a 9% increase year-on-year, with adjusted operating profit up 6% to $155 million[106] - 42% of Eastspring's managed funds outperformed their benchmarks over one year, and 45% outperformed over three years, with strong performance in fixed income and equity strategies[107] - Eastspring won 41 industry awards in the first half of 2024, including 19 Lipper Fund Awards and 8 Asia Asset Management Best of the Best Awards[107] - External managed funds increased to $103.6 billion, up 17% year-over-year[113] - Internal managed funds grew to $109.8 billion, a 2% increase year-over-year[113] - Total managed or advised funds reached $247.4 billion, up 9% year-over-year[113] - External net inflows totaled $2.887 billion, a 55% increase year-over-year[113] - Adjusted operating profit rose to $155 million, up 6% year-over-year[113] - IPAMC's direct customer base grew by 500,000 to 3.6 million in H1 2024[111] - IPAMC launched four new alternative

Investment Rating - Maintain BUY with a target price of HK$137.8, implying an upside of 83.7% from the current price of HK$75.00 [2][4]. Core Insights - Prudential Plc. announced a US$2 billion share buyback plan to be completed by mid-2026, alongside a projected annual dividend growth of 7%-9% for FY24E [2]. - The first tranche of US$700 million buyback will occur from June 24, 2024, to December 27, 2024, with an estimated reduction of approximately 78 million ordinary shares in FY24E [2]. - The company’s free surplus ratio remains strong at over 200%, with a free surplus of US$8.5 billion in 2023, indicating robust capital management [2][4]. - The buyback is expected to enhance liquidity for the Hong Kong-listed shares, which currently have a low floating share percentage of 6.73% [2]. - The insurer aims for a double-digit CAGR of gross operating free surplus generation, targeting over US$4.4 billion by 2027 [2][4]. Financial Performance Summary - Net profit is projected to increase from US$1.712 billion in FY23A to US$2.149 billion in FY24E, with operating EPS expected to rise from US$0.85 in FY23A to US$0.95 in FY24E [4][12]. - The Group's embedded value per share is forecasted to grow from US$16.4 in FY23A to US$18.4 in FY24E [4][12]. - The return on equity (ROE) is expected to improve from 9.8% in FY23A to 11.5% in FY24E [4][12]. Valuation Metrics - The stock is currently trading at a P/EV of 0.52x for FY24E, with a target P/EV of 0.95x [2][4]. - The projected dividend yield for FY24E is 2.3%, increasing to 2.5% in FY25E [4][12]. - The company’s net business profit (NBP) is anticipated to reach US$4.9-5.0 billion by FY27E, reflecting an 18% CAGR [2][4].

Investment Rating - The report assigns an "Accumulate" rating to Prudential (2378) [2][6]. Core Views - Prudential announced a $2 billion share buyback plan, which is expected to enhance shareholder returns and stabilize market confidence amid concerns over slowing NBV growth [6]. - The company has a robust free surplus reserve of $8.5 billion, with a free surplus ratio of 242%, indicating a strong capacity for shareholder returns [6]. - The dividend policy remains stable, with an expected annual dividend increase of 7%-9% for 2024 [6]. - The target price is maintained at HKD 108.64 per share, with projected EPS for 2024-2026 at $0.87, $1.12, and $1.19 respectively [6]. Financial Summary - Revenue for 2023 is projected at $9.371 billion, with a growth rate of 9.6% [5]. - The net profit for 2023 is expected to be $1.701 billion, showing a significant recovery from previous losses [5]. - The PE ratio for 2023 is estimated at 16.18, indicating a more favorable valuation compared to prior years [5].

Business Performance and Growth - Prudential's new business profit grew by 45% in 2023, with a target compound annual growth rate (CAGR) of 15-20% from 2022 to 2027[10] - New business profit grew by 45% to $3.125 billion in 2023, exceeding the 37% growth in annual premium equivalent sales[46] - The company has set a target to achieve a 15% to 20% compound annual growth rate in new business profit from 2022 to 2027[47] - New business profit for the year reached $3.125 billion, showing significant progress towards the 2027 target of $4.4–5.4 billion[48] - Agency channel new business profit grew by 75% to $2.096 billion, driven by a 67% increase in annual premium equivalent sales and a 37% growth in health and protection products[50] - Bancassurance new business profit decreased by 8% to $793 million, primarily due to challenging market conditions in mainland China and Vietnam[50] - Hong Kong contributed 45% of new business profit during the period, with both new business profit and annual premium equivalent sales more than tripling compared to the previous year[50] - Adjusted IFRS operating profit for the year was $2.893 billion, an 8% increase compared to 2022 on a constant exchange rate basis[50] - The company's estimated shareholder surplus above the prescribed capital requirement was $16.1 billion as of December 31, 2023, with a coverage ratio of 295%[50] - Total dividend for 2023 increased by 9% to 20.47 cents per share, with a second interim dividend of 14.21 cents per share approved by the board[51] - The company aims to achieve a customer Net Promoter Score (NPS) in the first quartile for all 10 business units by 2027, with a customer retention rate target of 90%–95%[53] - Prudential has an average of 68,000 monthly active agents in Asia, with over 9,000 qualifying as Million Dollar Round Table (MDRT) members[54] - The company aims to increase monthly active agents and double the new business profit per agent by 2027, targeting 2.5 to 3 times the 2022 level[54] - In 2023, the average monthly active agents increased by 3%, and the new business profit per active agent rose by 59% to over $2,800[54] - Prudential generated over 4 million sales leads through its digital lead platform PruLeads, with an 8% conversion rate into new sales[54] - The company sold approximately 1 million new policies through bancassurance in 2023, with recurring premium policies contributing over 90% of the Annual Premium Equivalent (APE) sales[55] - Health and protection products from bancassurance partners grew by 26% in APE sales, accounting for over 7% of total APE sales in 2023[55] - Prudential extended its partnership with Vietnam International Bank until 2036, incorporating a market-first enhanced business quality control method[56] - The company integrated former Citibank businesses in four markets through its key strategic partner UOB, gaining access to an additional 2.4 million bank customers[57] - Prudential is developing advanced, market-specific, and sustainable health insurance products, including risk-based pricing models and value-added services[57] - The company is implementing AI-driven underwriting and claims processes to enhance customer experience and combat fraud[57] - Health insurance business recorded new business profit of $330 million in 2023, a 20% increase[58] - The company aims to double the new business profit of health products between 2022 and 2027[58] - The company plans to reduce the number of applications by more than half by 2027, starting with the launch of PruServices 2.0 Web in Malaysia in January 2024, which will eliminate 15 customer service applications[59] - The company successfully reduced monthly incidents by 60% and recovery time by 40% in 2023[59] - Generative AI (GenAI) reduced product inquiry time from over 4 minutes to under 30 seconds in one market, with ongoing testing in two additional markets[60] - AI technology reduced underwriting time for non-standard cases from 3 days to 1.5 hours and claims payment processing time from 1.29 days in 2022 to 0.45 days in 2023 at CITIC-Prudential Life Insurance[60] - The company plans to implement at least two high-value data analytics and AI use cases in each strategic pillar by the end of 2024[60] - The company is building a global tech product-centric team for customer and agency pillars, with plans to deploy similar teams for other business areas by the end of 2024[59] - The company is establishing an AI lab to foster innovation and attract external talent, aiming to integrate AI and analytics into the organizational culture[60] - The company is implementing a new performance and compensation model in 2024 to align individual and team goals with its strategy and values[61] - The company aims to achieve the first quartile employee engagement by 2027[62] - The company plans to enhance wealth management and investment capabilities through its asset management arm, Eastspring, and support top agents to better serve affluent clients[62] - Eastspring manages over $237 billion in assets across 11 markets, ranking in the top 10 in six of these markets[71] - The company's distribution platform includes approximately 68,000 monthly active agents and over 200 bank partners, with 10 being strategic partners[71] - The company's customer retention rate has reached 86%, positioning it well to increase lifetime wallet share from existing customers[68] - The company ranks in the top three in 10 out of 14 Asian life insurance markets and in the top five in 6 out of 8 African life insurance markets[69] - The company plans to expand its product range for high-net-worth individuals, including estate and retirement planning, and aims to hire 1,000 additional advisors for its Prudential Financial Advisers (PFA) team by 2024[63] - The company's sales continued to grow in the first two months of 2024, and it is confident in achieving its 2027 financial and strategic goals[66] - The company is implementing organizational changes to enhance skills, improve capabilities, and prioritize value creation across markets[65] - The company is focusing on product innovation to offer personalized financial solutions, including wealth accumulation, protection, inheritance, and retirement planning[62] - The company's effective insurance and asset management business generated $2.74 billion in operating free surplus in 2023, remaining stable compared to 2022[80] - European Embedded Value (EEV) new business profit increased by 45% (at constant exchange rates) to $3.125 billion in 2023, driven by strong growth in Hong Kong and 12 markets with double-digit growth[79] - The company aims for a compound annual growth rate (CAGR) of 15% to 20% in new business profit from 2022 to 2027, focusing on agency, bancassurance, and health products[75] - European Embedded Value (EEV) shareholder equity increased by 7% (at constant exchange rates) to $45.3 billion in 2023, supported by a 45% rise in new business profit[81] - Adjusted operating profit grew by 6% (at actual exchange rates) to $2.893 billion in 2023, driven by reduced central costs and higher profits from asset management subsidiary Eastspring[82] - The company achieved a 50% reduction in weighted average carbon intensity compared to the 2019 baseline, progressing toward its 2030 target of a 55% reduction[76] - Four business units achieved top-quartile Net Promoter Scores (NPS) in 2023, aligning with the company's goal to reach top-quartile NPS by 2027[74] - The company plans to reinvest cash flows from existing policies into new business, customer expansion, digital-enabled distribution, and health capabilities to drive compound growth[73] - The company's IFRS post-tax profit improved to $1.712 billion in 2023, compared to a loss of $1.005 billion in 2022, due to reduced investment losses from rising interest rates[82] - Adjusted shareholders' equity increased to $37.3 billion, up 6% from $35.2 billion in 2022, driven by a 7% increase in IFRS shareholders' equity and a 5% increase in contract service margin[83] - New business profit grew 45% to $3.125 billion, driven by strong performance in Hong Kong and a rebound in annual premium equivalent sales post-pandemic[84] - Group European Embedded Value (EEV) operating profit rose 17% to $4.546 billion, supported by higher new business profit from insurance operations and reduced central costs[85] - The embedded value operating return improved to 10% in 2023, up from 9% in 2022[85] - Embedded value reached $45.3 billion as of December 31, 2023, compared to $42.2 billion on a constant exchange rate basis in 2022[85] - Operating free surplus generated from in-force insurance and asset management businesses was $2.74 billion, remaining stable compared to the previous year[85] - New business investment increased to $(733) million in 2023, up from $(552) million in 2022, reflecting higher annual premium equivalent sales and business mix changes[85] - Health and protection products contributed 40% to new business profit, with a 34% growth, while savings products saw a 54% increase in new business profit[84] - The company implemented IFRS 17 for insurance contracts in 2023, resulting in a restatement of 2022 figures, including an $18 billion increase in shareholders' equity at the transition date[85] - The S&P 500 index rose 24%, while the MSCI Asia ex-Japan index increased 4%, and the Hang Seng Index declined 14% in 2023[84] - Adjusted operating profit under IFRS increased by 8% to $2.893 billion, driven by a 10% increase in profit from the asset management business, Eastspring, and reduced central costs[86][89] - Net profit after tax under IFRS improved to $1.712 billion in 2023, compared to a loss of $1.005 billion in 2022, primarily due to short-term interest rate fluctuations[86] - Shareholders' equity increased by 7% to $37.3 billion, with a 5% increase in contract service margin, contributing to a net increase of 9% in contract service margin[86] - The company's capital coverage ratio stood at 295% as of December 31, 2023, with an estimated surplus of $16.1 billion above the prescribed capital requirements[86] - Total dividends for 2023 increased by 9% to 20.47 cents per share, with the second interim dividend rising by 9% to 14.21 cents per share[87] - The company executed a $41 million share buyback in January 2024 to offset dilution from employee and agent share plans and plans further buybacks[87] - Insurance business adjusted operating profit remained stable, with a 36% increase in profit from CITIC-Prudential Life and an 8% increase in Indonesia[88][89] - Asset management business profit increased by 8% to $280 million, contributing to the overall growth in adjusted operating profit[88][89] - The company plans to deploy $1 billion in investments to enhance customer, distribution, health protection, and technology capabilities as part of its updated strategy[86] - The company's leverage ratio remained near the lower end of its target range at 20%, maintaining a strong financial position[86] - Adjusted contract service margin release for 2023 was $2.205 billion, a 3% decrease from $2.265 billion in 2022, with a release rate of approximately 9.5%, consistent with 2022[90] - Risk adjustment release increased to $218 million in 2023, up 22% from $179 million in 2022, reflecting stable non-market risk expirations[91] - Experience variance worsened to $(118) million in 2023, compared to $(66) million in 2022, primarily due to increased claims and expenses[91] - Net investment performance decreased to $1.241 billion in 2023, down 4% from $1.290 billion in 2022, impacted by lower asset values following adverse market movements in 2022[91] - Contractual service margin (CSM) increased by $3.911 billion in 2023, driven by $2.348 billion from profitable new business and $1.563 billion from discount unwinding, exceeding the $2.208 billion released to the income statement[93][94] - CSM growth rate was 5% in 2023, or 9% excluding economic and other variances and exchange rate impacts[94] - Central costs (excluding restructuring and IFRS 17 implementation costs) decreased by 19% in 2023, reflecting targeted headquarters cost reductions and benefits from redeeming a debt instrument[95] - Restructuring costs were $201 million in 2023, down from $293 million in 2022, primarily related to IFRS 17 implementation and regulatory measures[95] - Headquarters expenses totaled $(230) million in 2023, a decrease from $(277) million in 2022[95] - Net investment return and other items improved by $23 million in 2023 due to higher returns from the group treasury amid rising interest rates[95] - Non-operating items for the year included short-term fluctuations in investment returns of -$774 million (2022: -$3.404 billion) and costs related to corporate transactions of $22 million (2022: profit of $55 million)[96] - The adjusted operating profit effective tax rate for 2023 was 15% (2022: 20%), reflecting deferred tax assets from past losses and reduced headquarters costs without tax credits[97] - The total tax contribution for 2023 was $969 million, slightly lower than the $1.009 billion paid in 2022[98] - The group completed the sale of its remaining interest in Jackson for $273 million in cash, generating a gain of $8 million[101] - Shareholder equity increased from $16.7 billion at the beginning of 2023 to $17.8 billion at the end of the year, reflecting profits earned during the period[100] - New business profit under the European Embedded Value (EEV) basis increased by 43% to $3.125 billion in 2023[102] - Operating profit from insurance business under EEV basis increased by 8% to $4.904 billion in 2023[102] - The group's EEV shareholder equity increased to $45.25 billion at the end of 2023 from $42.184 billion at the beginning of the year[102] - The effective tax rate for total profit under IFRS was 18% in 2023 (2022: -55%), reflecting reduced investment losses without tax credits[97] - The group's IFRS adjusted shareholder equity increased to $37.346 billion at the end of 2023 from $35.211 billion at the end of 2022[101] - Annual Premium Equivalent (APE) sales increased by 34% to $5.876 billion, with new business profit rising by 43% to $3.125 billion[103] - The Group's European Embedded Value (EEV) operating profit increased by 17% to $4.546 billion, driven by a 9% rise in insurance business operating profit and a 10% increase in asset management operating profit[103] - New business profit from insurance operations surged by 45% to $3.125 billion, driven by growth in APE sales, partially offset by a 24% decline in in-force business profit to $1.779 billion[104] - Non-operating losses decreased significantly to $834 million in 2023 from $7.53 billion in 2022, primarily due to adverse equity market returns in Mainland China and Hong Kong, as well as lower interest rates and narrower credit spreads[104] - The Group's EEV shareholder equity increased to $45.3 billion as of December 31, 2023, up from $42.2 billion in 2022, with $41.5 billion related to insurance operations[104] - Greater China contributed 49% of the Group's total earned gross premiums and 60% of new business profit, with earned gross premiums at $12.859 billion and new business profit at $1.87 billion[106] - The Group aims to achieve a shareholder coverage ratio of over 150% of the prescribed capital requirements and plans to invest approximately $1 billion in core capabilities, including customer, distribution, health, and technology[107] - The Group expects to convert over $9 billion from the in-force business value and required capital into operating free surplus by the end of 2027, based on 2023 EEV assumptions[107] - Group free surplus increased by 3% to $1.395 billion in 2023, driven by lower central costs and restructuring expenses[110] - Insurance and asset management operating free surplus decreased by 8% to $2.007 billion, reflecting a 33% increase in new business investment costs[109] - New business investment costs rose by 33% to $733 million, in line with a 37% increase in annual premium equivalent sales[109] - Group free surplus at the end of 2023 stood at $12.455 billion, up from $12.229 billion at the beginning of the year[109] - Group regulatory capital surplus above the prescribed capital requirement was $19.0 billion, with a coverage ratio of 197%[113] - Group regulatory Tier 1 surplus above the minimum capital requirement was $12.4 billion, with a coverage ratio of 313%[113] - The company expects annual dividend growth of 7% to 9% for 2023 and 2024, with 2023 total cash dividends increasing by 9% to 20.47 cents per share[111] - Effective insurance and asset management operating free surplus remained stable at $2.740 billion, nearly unchanged from the previous year[109] - Central costs and write-offs, including interest on core structural borrowings and corporate expenses, decreased by 14% and 17%, respectively[109] - The company's capital resources totaled $38.6 billion, with Tier 1 capital resources at $18.3 billion as of December 31, 2023[113] - The company's estimated shareholder group regulatory capital surplus was $16.1 billion as of December 31, 2023, with a

Investment Rating - Maintains an "Overweight" rating with a target price adjustment to HKD 108.64, corresponding to 0.77x P/EV for 2023 [2] Core Views - The company achieved a turnaround in net profit for 2023, driven by improved investment returns, with a net profit of USD 1.701 billion [2] - The dividend payout for 2023 was 20.47 cents per share, a 9% year-on-year increase [2] - The New Business Value (NBV) grew by 43% (actual exchange rate) and 45% (fixed exchange rate), with Hong Kong contributing 267% growth, accounting for 45% of the group's NBV [2] - Mainland China's NBV declined by 40%, primarily due to product pricing adjustments and challenges in the bancassurance channel [2] - The company expects further growth in Hong Kong and a turnaround in Mainland China to drive NBV growth in 2024 [2] Financial Highlights - Revenue/Insurance service income for 2023 was USD 9.371 billion, a 9.6% increase year-on-year [3] - Gross profit for 2023 was USD 1.712 billion, compared to a loss of USD 997 million in 2022 [3] - Net profit for 2023 was USD 1.701 billion, a significant improvement from a loss of USD 1.007 billion in 2022 [3] - The PE ratio for 2023 was 16.18, and the PB ratio was 1.54 [3] Business Performance - Hong Kong's annualized new premiums increased by 276%, with the agency channel contributing 70% of the growth [2] - Mainland China's annualized new premiums decreased by 40% (actual exchange rate) and 36% (fixed exchange rate) [2] - The company added 4,000 new agents in Hong Kong in 2023, supporting future growth [2] - In Mainland China, the agency channel's annualized premiums grew by 25%, with per capita policies and NBV increasing by 11% and 26%, respectively [2] Asset Allocation - The company's total assets were USD 156.120 billion at the end of 2023, with debt securities accounting for 53.2% of the portfolio [7] - Equity securities and collective investment plans made up 41.5% of the asset allocation [7] Operational Metrics - The post-tax operating profit for 2023 was USD 2.438 billion, a 12.2% increase year-on-year [8] - The embedded value (EV) at the end of 2023 was USD 45.250 billion, a 7.3% increase from the previous year [10]