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1. Company Snapshot

1.a. Company Description

Prudential plc, through its subsidiaries, provides life and health insurance, and retirement and asset management solutions to individuals in Asia, and Africa.It offers health and protection, as well as savings products, such as participating, linked, and other traditional products.The company also provides insurance against common critical illnesses, including cancer, stroke, and heart attack; and tropical disease protection, such as dengue, malaria, and measles.


It manages assets across equity, fixed income, multi asset, quantitative, and alternative strategies on behalf of institutional and individual investors.Prudential plc provides its products and services through agency sales force, banks, and brokers.The company was founded in 1848 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on PRU

Prudential's recent performance has been positively driven by improved revenue forecasts and recent business trends. The company's Fair Value Estimate has seen a slight increase, rising from £11.998 to £12.03. Analysts are reassessing the company’s growth trajectory, reflecting a mix of optimism and measured caution. The recent earnings release showed a higher profit in the first half of the year, beating consensus projections. Additionally, the company's new business profit grew, driven by buoyant demand in markets from Hong Kong to Indonesia.

1.c. Company Highlights

2. Prudential plc Delivers Strong H1 2025 Results with Double-Digit Growth

Prudential plc reported a robust financial performance in the first half of 2025, with new business profit and adjusted operating profit per share growing 12%, and dividends per share increasing 13%. The company's gross operating free surplus generation grew 14%. The actual EPS came out at 0.3656, beating estimates at 0.3411. The company's revenue growth is expected to be around 7.8% next year, according to analysts' estimates.

Publication Date: Aug -29

📋 Highlights
  • Double-Digit Financial Growth:: New business profit and adjusted operating profit per share grew 12% each, with dividends per share up 13% and gross operating free surplus generation rising 14%.
  • Capital Management Update:: Completed $1B share repurchase program and introduced a total return-oriented capital allocation framework, targeting enhanced shareholder returns starting in 2026.
  • Technology & Agency Investment:: Invested $400M in capabilities (with $100M–$120M planned by year-end and $200M–$250M in 2026) to drive agency productivity, despite a 7% YoY decline in active agents.
  • China Market Focus:: Implementing change management programs to reverse agency momentum, with 10% productivity gains achieved and 7–10% growth targeted in 2026–2027.
  • 2027 Financial Outlook:: Anticipates significant net free surplus growth, translating to higher holding company free cash flow, potentially enabling dividend leaps by 2028.

Financial Highlights

The company's financial performance was driven by its sharp execution, focus on writing high-quality new business, and effective management of in-force business. The company's investments in targeted initiatives, such as modernizing technology, processes, and capabilities, have contributed to its success. The Price-to-Book Ratio stands at 2.08, indicating a reasonable valuation. The Dividend Yield is 1.93%, reflecting the company's commitment to returning capital to shareholders.

Capital Management and Allocation

The company has reached an inflection point in its capital generation, enabling it to update its capital management program and increase shareholder returns. The company's capital allocation framework reflects a move to a total return orientation, and shareholders are expected to benefit from additional capital returns from 2026. The company's focus on driving quality new business and improving margins is expected to drive future growth.

Business Performance

The company's agency new business profit is expected to grow through two levers: driving active agents and improving productivity. While active agents have been flat to down, productivity has improved by 10%. The company is investing in its technology platform and focusing on quality recruitment to drive active agents. In Hong Kong, the company has seen double-digit growth in agency new business profit, although Malaysia and Vietnam have been challenging markets.

Outlook and Guidance

The company remains confident in achieving its 2027 financial objectives, driven by its strong business model, capital generation, and strategic progress. The company expects improvements in the second half of 2025 and 2026 due to the measures taken, including investments in growth drivers such as expanding distribution and focusing on customer experience. The company's guidance on required capital growth is expected to be in the early double-digit range, with strain increasing broadly in proportion to new business volumes.

3. NewsRoom

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How Recent Analyst Upgrades Are Shaping the Story Behind Prudential’s Valuation

Nov -27

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What Catalysts Are Shaping the Changing Narrative for Prudential?

Nov -10

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Why Analysts See a Changing Story for Prudential as Confidence Rises and Risks Remain

Oct -27

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How Analyst Sentiment Is Shifting the Story for Prudential After Recent Developments

Oct -13

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3 Insurance Stocks with Open Questions

Oct -09

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Prudential Health Partnership Networking Cocktail Reception brings medical partners and industry leaders together to advance healthcare protection

Oct -03

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PFG vs. PUK: Which Stock Is the Better Value Option?

Sep -29

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How the Narrative Around Prudential Is Evolving After Recent Analyst Updates and Market Moves

Sep -24

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.10%)

6. Segments

Insurance Operations - Singapore

Expected Growth: 6.0%

Singapore's mature insurance market suggests a more conservative growth rate compared to emerging markets, but the segment's strong presence and stable demand support a growth rate near the global average, albeit slightly lower due to market maturity.

Insurance Operations - Growth Markets and Other

Expected Growth: 12.0%

Emerging markets typically exhibit higher growth rates due to lower insurance penetration rates and growing economies, making this segment likely to outperform the global average growth rate.

Insurance Operations - Hong Kong

Expected Growth: 7.0%

Hong Kong's mature insurance market, similar to Singapore, suggests a relatively stable but not spectacular growth rate. The segment is expected to grow at a rate slightly below the global average due to market saturation.

Insurance Operations - Malaysia

Expected Growth: 10.0%

Malaysia's growing economy and increasing insurance penetration support a higher growth rate than mature markets, positioning it closer to but still below the growth rates of the most dynamic emerging markets.

Insurance Operations - Indonesia

Expected Growth: 11.0%

Indonesia's large population and growing economy drive demand for life insurance, suggesting a growth rate higher than the global average, capitalizing on the country's emerging market dynamics.

Eastspring

Expected Growth: 8.0%

As an asset manager, Eastspring's growth is tied to global asset management industry trends, which are influenced by economic conditions, investor appetite, and regulatory environments. A growth rate near the global average is expected, adjusted for the segment's specific market conditions.

Unallocated to a Segment

Expected Growth: 8.1%

This category, being more about cost allocation and less about operational revenue, is assumed to follow the global growth hypothesis closely as it reflects overall corporate performance.

Inter Segment Eliminations

Expected Growth: None%

None

7. Detailed Products

Life Insurance

Provides financial protection to individuals and their families in the event of death or terminal illness.

Health Insurance

Covers medical expenses, including hospital stays, surgeries, and other medical treatments.

Investments

Offers a range of investment products, including unit trusts, bonds, and pensions.

Retirement Solutions

Provides pension and retirement planning services to help individuals achieve their retirement goals.

Asset Management

Manages investments on behalf of institutional clients, such as pension funds and insurance companies.

Eastspring Investments

Offers a range of investment products, including equities, fixed income, and multi-asset solutions.

8. Prudential plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Prudential plc operates in the insurance industry, where substitutes are limited. However, customers may opt for self-insurance or alternative financial products, posing a moderate threat.

Bargaining Power Of Customers

Prudential plc's customers have limited bargaining power due to the company's strong brand and diversified product offerings, making it difficult for customers to negotiate prices or terms.

Bargaining Power Of Suppliers

Prudential plc has a diversified supply chain, and its suppliers have limited bargaining power due to the company's large scale and negotiating power.

Threat Of New Entrants

The insurance industry has high barriers to entry, including regulatory hurdles and capital requirements, making it difficult for new entrants to compete with established players like Prudential plc.

Intensity Of Rivalry

The insurance industry is highly competitive, with many established players competing for market share. Prudential plc faces intense rivalry from competitors, which can lead to pricing pressures and advertising wars.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 21.47%
Debt Cost 4.32%
Equity Weight 78.53%
Equity Cost 10.25%
WACC 8.98%
Leverage 27.35%

11. Quality Control: Prudential plc passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Wüstenrot & Württembergische

A-Score: 6.5/10

Value: 7.8

Growth: 2.0

Quality: 5.9

Yield: 6.9

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Standard Chartered

A-Score: 6.3/10

Value: 7.9

Growth: 5.7

Quality: 5.0

Yield: 3.8

Momentum: 10.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Prudential

A-Score: 5.7/10

Value: 2.2

Growth: 5.4

Quality: 8.0

Yield: 2.5

Momentum: 8.5

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Aon

A-Score: 4.9/10

Value: 1.8

Growth: 6.8

Quality: 6.0

Yield: 1.2

Momentum: 5.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Willis Towers Watson

A-Score: 4.9/10

Value: 2.4

Growth: 4.0

Quality: 5.7

Yield: 1.2

Momentum: 7.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
LSEG

A-Score: 4.6/10

Value: 2.9

Growth: 7.9

Quality: 5.5

Yield: 1.9

Momentum: 1.5

Volatility: 7.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

10.78$

Current Price

10.78$

Potential

-0.00%

Expected Cash-Flows