Goldman Sachs: Reiterated "buy" rating for PRU (02378) with target price raised to 150 Hong Kong dollars.

Goldman Sachs released a research report stating that PRU (02378) will announce its 2025 fiscal year performance on March 19. Goldman Sachs predicts that PRU's new business value (NBP) in the fourth quarter and the full year of the 2025 fiscal year will increase by 10% and 12% respectively compared to the previous year, and the momentum of operating free cash flow (OFSG) in the second half of the year will continue to be strong (16% year-on-year growth, compared to 14% year-on-year growth in the first half of the year). The bank has raised PRU's target price from HK$136 to HK$150 and reiterated a "buy" rating. The bank expects growth in PRU's businesses in Hong Kong and Indonesia in the fourth quarter of the 2025 fiscal year to slow down, but this is partly offset by accelerated growth in mainland China, seasonally improving performance in Malaysia, and the positive impact of the depreciation of the US dollar relative to the fourth quarter of 2024. Overall, the 12% growth in the 2025 fiscal year aligns with the company's double-digit growth target and Visible Alpha's expected year-on-year growth of 13%. Goldman Sachs predicts that PRU's free cash flow generation (OFSG) in the second half of the 2025 fiscal year will be $1.521 billion, up 16% year-on-year, 6% higher than market consensus, benefiting from the release of profits from later policy premiums and smaller negative operational variations. The bank expects net free cash flow generation (NFSG) (excluding new business investments and other expenses) to grow at a faster pace, up 27% year-on-year.