The Zhitong Finance App learned that Goldman Sachs released a research report stating that it lowered Prudential's (02378) Hong Kong stock target price by 2% from HK$152 to HK$149, maintaining a “buy” rating.
Given the company's results for the first half of 2026, Goldman Sachs fine-tuned its new business value (NBP) forecast and expected the increase in profit margins to largely offset the negative impact on sales. The bank raised the 2026-2028 after-tax operating profit (OPAT) forecast by 2-5%, but lowered the 2026 net profit forecast by 27% to reflect large fluctuations in non-operating factors in the first half of 2026. The book value forecast was lowered by 7% to reflect the negative impact of the first half of 2026.
Prudential's performance for the first half of 2026 was roughly in line with the bank's expectations. The value of the new business (calculated at a fixed exchange rate) reached a high number of units, and operating profit (before tax) and total operating free surplus (OFSG) both reached two years of growth. Management reaffirmed the target for double-digit growth in the value of new businesses in FY2026, which means that growth will accelerate in the second half of the year despite the challenges of base effect. The bank believes that the impact of growth in the second half of the year may be mainly concentrated in the fourth quarter, which has always been a low season in mainland China. Despite this, the third-quarter results are still critical to stock price performance, as it reflects: 1) the demand in the Hong Kong market, particularly from visitors from mainland China; 2) the growth in sales and profit margins in the mainland China market.