PRUDENTIAL PLC.(2378.HK):US$2BN SHARE BUYBACKS BRACE FOR SUSTAINABLE SHAREHOLDERS RETURN; SUPPORTIVE TO HK LIQUIDITY
PRUDENTIAL PLC.(2378.HK):US$2BN SHARE BUYBACKS BRACE FOR SUSTAINABLE SHAREHOLDERS RETURN; SUPPORTIVE TO HK LIQUIDITY
Prudential unveiled the long-awaited capital management update of US$2.0bn share buyback plan which will be completed no later than mid-2026, in addition to the annual dividend growth of 7%-9% in FY24E, as announced at year start (link).
保誠公佈了期待已久的20億美元股票回購計劃的資本管理更新，該計劃將在2026年中旬之前完成，另外，在年初宣佈的24E財年年度股息增長爲7%-9%（鏈接）。
The first tranche of US$700mn buyback will operate from 24 Jun 2024 to no later than 27 Dec 2024 throughout 2H24. Under our estimates, this would reduce the company's ordinary shares by c.78mn in FY24E, and c.224mn in total to 2,530mn shares outstanding by mid-2026, not taking into account of other buybacks, if any, relevant to employee and agent share schemes and/or scrip dividends in future.
20年6月24日至2024年12月27日，在2024年下半年，第一批7億美元的回購將開始運作。根據我們的預計，這將在24E財年將公司的普通股減少約7800萬股，到2026年中旬的總股本將減少約2.24億股，不考慮未來與員工和代理股票計劃和/或股息股票交換有關的其他回購。
The repurchased c.224mn shares (CMBI est), representing 8.1% of total shares outstanding as of 21 Jun 2024, will be cancelled on the London listing (PRU.LN), while the shares on HK line (2378.HK) and the US ADR (PUK.US) will stay intact.
回購的大約2.24億股（CMBI估計），佔截至2024年6月21日總股本的8.1％，將取消倫敦上市（PRU.LN）的股份，而在香港上市（2378.HK）和美國ADR股份（PUK.US）上市的股份將保持不變。
We view the timely executed buyback is indicative of the company's emphasis on capital return to shareholders, while maintaining sufficient surplus on top of the regulatory capital requirements and internal stress buffers. Moreover, consistent to the Group's long pursuit of boosting HK shares' liquidity, the buybacks centring on the London line (PRU.LN) provide tailwinds for turnover of HK listing (2378.HK), of which the trading volume hiked 17.7x on 24 Jun, with turnover rising to 0.16% (vs 21 Jun: 0.01%, Fig.1). That said, the company's share structure still reckons heavily on the overseas markets, since the floating shares of Hong Kong only accounted for 6.73% of total shares outstanding as of 17 Jun 2024 (Fig.2).
我們認爲，及時執行的股票回購計劃表明了公司重點關注向股東回報資本的意願，同時保留了足夠的盈餘，以滿足監管資本要求和內部壓力測試緩衝。此外，與集團長期追求提高香港股票流動性的一貫理念相一致，以倫敦股票爲中心的回購，爲港股上市（2378.HK）的交易額提供了助力。其中，6月24日，交易量增加了17.7倍，成交量達到0.16%（21日：0.01％，圖1）。儘管如此，公司的股份結構仍然在海外市場上佔據主導地位，自2024年6月17日以來，香港的流通股份僅佔總股本的6.73%（圖2）。
Strong capital base with free surplus ratio stayed at >200%. GivenUS$8.5bn group free surplus excl. distribution rights and intangibles in 2023, the insurer managed to derive a free surplus ratio at 242% on top of the EEV required capital of US$6.0bn (Fig.3). If taking into account of the second interim dividends (US$0.1421 per share) in 2023 and the forthcoming US$2bn share buyback, we estimate the Group's free surplus ratio to remain solid at 202% on a pro-forma basis, staying above the operating range of 175%-200% as guided by the management. (Fig.3). We think gross operating free surplus generation (Gross OFSG) will lead the growth of group free surplus going forward, and OFSG will be driven by the rise of NBV at core. We expect the NBV growth in FY24E to be driven by volumes along with limited downside to margins. The capital policy re-emphasized the targets of five-year strategic plan, which called for a double-digit 5Yr CAGR of gross OFSG to reach >US$4.4bn by 2027. In our model, we forecast the gross OFSG to be US$4.5bn in FY27E, implying a 10.4% five-year CAGR from an aggregate of US$2.8bn by end-FY22 .
強大的資本基礎，自由盈餘比率保持在200%以上。在2023年，該保險商在不包括分配權益和無形資產的情況下擁有85億美元的自由盈餘，成功地在EEV要求的60億美元資本之上推導出242%的自由盈餘比率（圖3）。如果考慮到2023年第二次中期股息（每股0.1421美元）和即將到來的20億美元股票回購，我們預計集團的自由盈餘比率將在基於略作調整的基礎上保持在202%的水平，保持在管理層指導的175%-200%操作區間之上。（圖3）。我們認爲，毛營運自由盈餘生成（毛略）將引領集團自由盈餘的增長，毛略將由核心的NBV的增長驅動。我們預計，FY24E的NBV增長將受到銷售量的推動，並且利潤空間的下降將受到限制。資本策略重申了五年戰略計劃的目標，該目標要求毛略的五年CAGR達到超過44億美元，到2027年達到雙位數（Fig. 6）。我們的模型中，我們預計FY27E的毛略爲45億美元，這意味着從FY22年底的28億美元開始，五年CAGR爲10.4％。
London-based repurchase supportive to HK liquidity improvement. Theinsurer centring the US$2bn buyback on London Stock Exchange (LSE) will repurchase and cancel c.224mn shares in total, based on our estimate. Given a structure of >93% floating shares traded in overseas markets, the Group has long been willing to improve shares' trading liquidity for the HK-listed name 2378.HK. We expect the proportion of HK floating shares to marginally increase from 6.7% to 7.3% (CMBI est, Fig.5) upon completion of buybacks, presuming no future capital movements. In our view, an improved floating share structure will provide tailwinds for subsequent stock issuance in HK market, offsetting the dilutive effect while boosting liquidity of the respective shares.
倫敦回購支持香港流動性改善。保險商以倫敦證券交易所（LSE）爲中心的20億美元股票回購，將總共回購和取消大約2.24億股，根據我們的估計。考慮到海外市場超過93％的流通股，該集團長期致力於提高在香港上市的2378.HK的股票交易流動性。在回購完成後，我們預計香港流通股比例將從6.7％略微增加至7.3％（CMBI估計，圖5），假定未來沒有資本變動。在我們看來，改善的流通股份結構將爲以後在香港市場上發行的股票提供助力，抵消其稀釋效應，同時提高其流動性。
Valuation: Despite a slower new business profit (NBP) growth in 1Q24 and mixed economic data adding to macro uncertainty, we regard the insurer's US$2bn capital return through buybacks a driver for mid-to-long term re-rating.
估值：儘管1Q24新業務利潤增長較慢，且經濟數據混合，增加了宏觀不確定性，我們認爲保險公司通過回購20億美元的資本回報是中長期重估的推動力。除了10億美元的有機增長投資計劃之外，我們預測保險公司的NBP到FY27E將達到4.9-5.0億美元，意味着18％的五年CAGR（圖6），符合15-20％的指導意見。目前，股票正在以FY24E 0.52xP/ EV的價格交易。維持買入，目標價爲137.8港元，意味着FY24E P / EV的0.95倍。
Together with the US$1bn investment plan for organic growth, we forecast the insurer's NBP to be US$4.9-5.0bn by FY27E, implying 18% five-year CAGR (Fig.6), in line with the guidance of 15-20%. The stock is now trading at FY24E 0.52x P/EV. Maintain BUY with TP at HK$137.8, implying 0.95x FY24E P/EV.
伴隨着20億美元的股票回購計劃和10億美元的有機增長投資計劃，我們預測保險公司的NBP到FY27E將達到4.9-5.0億美元，這意味着18％的五年CAGR（圖6），符合15-20％的指導意見。該股票現在以FY24E 0.52x P/ EV的價格交易。維持買入，目標價爲137.8港元，意味着FY24E P/EV的0.95倍。
譯文內容由第三人軟體翻譯。