CICC: Maintains outperform rating on PRU (02378) with a target price of HKD 151.35.

CICC issued a research report stating that PRU (02378) is currently trading at 0.9x 26e P/EV. The bank maintains the company's outperform industry rating unchanged, keeps the company's 26e/27e earnings forecasts basically unchanged, and maintains a target price of HK$151.35 unchanged, corresponding to 1.2x/1.1x 26e/27e P/EV and a 32% upside. Key points from CICC are as follows: Performance in 2025 is in line with expectations PRU announced its 2025 performance: New Business Profit (NBP) increased by 13% yoy to $2.782 billion, Annualized New Business Premium (APE) increased by 7% to $6.661 billion, Adjusted After-tax Operating Profit (Adjusted OPAT) increased by 7% to $2.772 billion, in line with market expectations. Agent capacity improved, rapid growth in bancassurance The company's 2025 NBP increased by 13% yoy to $2.782 billion, with the new business profit margin increasing by 2ppt to 42% yoy. Agent capacity has improved, with NBP per active agent increasing by 15% yoy, driving NBP through agent channels up by 4%. Bancassurance channel NBP increased by 27% to $1.033 billion. Steady growth in Hong Kong business, dual-driven by agents and bancassurance NBP in the Hong Kong market increased by 12% yoy to $1.221 billion, APE increased by 8% and the new business value rate increased by 2ppt to 55% yoy. Strong demand from local and mainland visitors, with agent channel NBP increasing by 9% yoy (fixed exchange rate), monthly average active agent numbers increasing by 12% yoy; bancassurance channel NBP increased by 25% (fixed exchange rate), with the new business profit margin also increasing. High growth in new business in mainland China, optimistic about development opportunities under the "deposit relocation" trend CITIC PRU's 2025 APE increased by 34% to $621 million, NBP increased by 28% to $282 million, with the percentage of dividend insurance in new policies increasing to around 40% (compared to approximately 15% in 2024); bancassurance channel continued high growth, with NBP increasing by 59% yoy (fixed exchange rate), and management's target for 2026 is to expand the network of branches with CITIC BANK from 50 to 100. The bank believes that in the context of "deposit relocation" and customer upgrading, the company is expected to meet good development with a high-quality agent team and bank network. Shareholder returns expected to increase The company's full-year dividend per share for 2025 is $0.266, up 15% yoy, and is expected to increase by more than 10% yoy for common stock dividends per share in 2026 and 2027. In addition, the company announced a capital return plan of $1.2 billion/$1.3 billion for 2026 and 2027. The bank believes that the company's new business trends are positive, with sufficient free cash flow (free cash flow generated from operations in 2025 increased by 15% to $3.059 billion), and there is potential for continued increase in shareholder returns. Risks: New business premium growth below expectations; fluctuations in US bond rates; overseas financial risk events.