Xiaomo: AIA (01299) is expected to consider adjusting dividends and regular repurchases to improve return on capital

Zhitong Finance ·  Apr 19 13:53

Komo predicts that AIA's compound annual growth rate of about 8% of dividends per share from 2024 to 2026 has the potential to rise.

The Zhitong Finance App learned that Xiaomo released a research report saying that Prudential (02378) and AIA (01299) are at a rock bottom. Although concerns about mainland economic growth have been reflected to a large extent, investors are skeptical about the implicit value itself and the degree of monetization, and hope that the two insurance companies will support corporate value (EV) by increasing return on capital. Given strong free cash flow growth prospects and capital and cash flexibility, the bank is confident that AIA and Prudential will consider this in the coming quarters.

The bank predicts that Prudential and AIA's free cash flow returns this year will be around 5% and 6%, respectively. It is currently predicted that AIA's compound annual dividend growth rate of about 8% from 2024 to 2026 has the potential to rise. I believe AIA has sufficient flexibility to readjust dividends and consider a more regular repurchase plan after completing the current repurchase plan. Motong believes Prudential may consider increasing dividends or buybacks. Prudential management has indicated that it is willing to listen to the market's views on its return on capital policies. The 2022 to 2024 guideline target a dividend growth rate of 7% to 9%. The bank expects the company to reach the upper limit of the target range, and believes that Prudential will consider readjusting the dividend per share or providing higher dividend per share growth guidelines starting in 2025. At the same time, it is believed that Prudential has capital that can be considered for repurchase.

The translation is provided by third-party software.

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