Goldman Sachs: Downgrades PRU (02378) target price for Hong Kong stocks to HKD 149, maintains "Buy" rating.

Goldman Sachs has published a research report stating that it has lowered the target price for PRU (02378) in Hong Kong stocks by 2%, from HKD 152 to HKD 149, maintaining a "Buy" rating. In light of the company's performance in the first half of 2026, Goldman Sachs has slightly adjusted its predictions for new business value (NBP) and anticipates that improvements in profit margins will largely offset the negative impacts on sales. The firm has raised its forecasts for after-tax operating profit (OPAT) for the fiscal years 2026-2028 by 2-5%, but has cut its net profit forecast for fiscal year 2026 by 27% to reflect significant fluctuations in non-operational factors during the first half of 2026. It has also lowered its projected book value by 7% to account for the negative effects in the first half of 2026. The performance of PRU in the first half of 2026 was roughly in line with the firm's expectations, with new business value (calculated at constant exchange rates) showing a high single-digit growth, and both operating profit (pre-tax) and the total operating free surplus generation (OFSG) achieving double-digit annual growth. Management reiterated the target for double-digit growth in new business value for fiscal year 2026, which indicates that despite facing challenges due to base effects, growth is expected to accelerate in the second half of the year. The firm believes that the impact of growth in the second half may be primarily concentrated in the fourth quarter, which is traditionally a low season in mainland China. Nevertheless, the performance in the third quarter is still crucial for stock price performance, as it reflects: 1) demand in the Hong Kong market, especially from mainland Chinese visitors; 2) sales growth momentum and improvements in profit margins in the mainland Chinese market.