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Prudential: Solid Credit But China Weakness May Pressure Peer Credits

FINANCIALS

Prudential (PRU LN) 2H23 results look solid but growth indicators in China are weak which may pressure the credit of AIA, HSBC and StanChart today. The size of China CRE is sized here (USD1.2bn direct) without giving indications of its performance recently.


  • Key credit metrics: GWS (group wide supervision) surplus over requirement is USD19bn (197%), up from USD18.2bn (194%) at Jun-23 and group operating free surplus generation was only marginally lower in the second half. These look solid, in our view.
  • Operating metrics: new business profit was up 50% y/y in 2H23 (14% ahead of consensus). APE sales were up 30% (6% ahead of consensus) driven by HK but China JV with CITIC was very weak, alongside Indonesia. Net profit was up 50% y/y but lower than 1H23 and missed consensus by 29%.
  • Outlook: indications are scant with only indication that “sales growth has continued” in first two months of 2024. Other indicators, especially around China and Vietnam look relatively muted, we feel.

Conf call at 0830 (London) at: https://www.investis-live.com/prudential/65d362b6d0d520120026534a/taer

Credit BulletsHomepagemarkets-real-timeCreditBank Of England (BOE) Market NewsPrudential plc (PRU) Market NewsBulletUK
Credit BulletsHomepagemarkets-real-timeCreditBank Of England (BOE) Market NewsPrudential plc (PRU) Market NewsBulletUK

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