Prudential’s 1H26 outlook: Hong Kong margins improve as mainland China margins come under pressure
Prudential (2378.HK/PRU.L) is scheduled to report its first-half 2026 results on Aug.
Prudential (2378.HK/PRU.L) is scheduled to report its first-half 2026 results on Aug. 27, 2026. Goldman Sachs expects new business profit to reach US$1,397 million, up 11%, and adjusted operating profit to reach US$1,807 million, up 10%. Both forecasts are above market consensus. Goldman expects net profit of US$1,852 million, up 44%, significantly above consensus, which calls for an 11% increase.
By market, Hong Kong new business profit growth is expected to slow to 9%, while the profit margin is forecast to improve sharply by 5 percentage points to 54%. Mainland China new business profit is expected to rise 11%, but the margin is projected to decline by 6 percentage points to 38%, with the bancassurance channel disrupted by tighter policies. Malaysia is expected to deliver strong 24% new business profit growth, supported by a recovery in the agency channel and favorable currency effects. Singapore’s new business profit is expected to increase 12%, with the margin remaining stable.
The interim dividend is expected to rise 15% to 8.87 U.S. cents. Overall, Goldman Sachs describes Prudential’s first-half performance as steady, with improving margins in Hong Kong and strong growth in Malaysia as highlights, while mainland China margins remain under pressure.
Goldman Sachs also identifies several catalysts: the Aug. 27 first-half results, with attention on Hong Kong’s new business profit momentum and the recovery of bancassurance sales in mainland China; an update to the full-year 2026 new business profit growth target; progress on the India strategy, including the Bharti Life acquisition and the reduction of Prudential’s stake in ICICI Pru Life; the potential effect of the agency transformation on new business profit growth; and expansion in the high-net-worth segment and through brokerage channels.
Goldman Sachs says Prudential’s current 0.8-times P/EV valuation is at a historical low and believes the company’s potential re-rating has not been fully reflected by the market. Investment recommendations, target prices and implied-return calculations are omitted from this editorial version.
By market, Hong Kong new business profit growth is expected to slow to 9%, while the profit margin is forecast to improve sharply by 5 percentage points to 54%. Mainland China new business profit is expected to rise 11%, but the margin is projected to decline by 6 percentage points to 38%, with the bancassurance channel disrupted by tighter policies. Malaysia is expected to deliver strong 24% new business profit growth, supported by a recovery in the agency channel and favorable currency effects. Singapore’s new business profit is expected to increase 12%, with the margin remaining stable.
The interim dividend is expected to rise 15% to 8.87 U.S. cents. Overall, Goldman Sachs describes Prudential’s first-half performance as steady, with improving margins in Hong Kong and strong growth in Malaysia as highlights, while mainland China margins remain under pressure.
Goldman Sachs also identifies several catalysts: the Aug. 27 first-half results, with attention on Hong Kong’s new business profit momentum and the recovery of bancassurance sales in mainland China; an update to the full-year 2026 new business profit growth target; progress on the India strategy, including the Bharti Life acquisition and the reduction of Prudential’s stake in ICICI Pru Life; the potential effect of the agency transformation on new business profit growth; and expansion in the high-net-worth segment and through brokerage channels.
Goldman Sachs says Prudential’s current 0.8-times P/EV valuation is at a historical low and believes the company’s potential re-rating has not been fully reflected by the market. Investment recommendations, target prices and implied-return calculations are omitted from this editorial version.