Asia-focused insurer Prudential (GB:PRU) has reported an 8% rise in first-half operating profits – but warned of difficulties in securing new business.
The insurer posted operating profits of $1.66 billion in the six months to 30 June, just shy of analyst forecasts of $1.68 billion.
But Prudential’s report warned that its Hong Kong division’s new business profits fell 31% to $211m thanks to lockdowns under China’s zero-Covid policy.
The insurer warned of ‘challenging’ and ‘complex’ times ahead in 2022.
Prudential’s ‘challenges’ in 2022
The FTSE-100-listed insurance group saw new business profits falling 5% to $1.1 billion which the company said was caused in part by higher interest rates plus geographical and channel differences.
Chief executive Mark FitzPatrick said: “We achieved stronger APE sales growth in the second quarter as conditions started to normalise in most markets.
“Although there are signs that Covid-19-related impacts in many of our markets are stabilising, over the remainder of the year we expect that operating conditions may continue to be challenging.”
Prudential is rebalancing staffing between its London and Hong Kong offices, with 60% of head office staff now based in Hong Kong and less than 200 employees left in London.
View from the City
According to TipRanks’ analyst rating consensus, Prudential stock has a Strong Buy rating, based on six Buy and no hold or sell rankings.
The average price target is 1529.50p, which is 54.03% higher than the current price level. The stock has a high forecast of 1687p and a low forecast of 1300p.
Conclusion
Analysts remain bullish on Prudential stock despite short-term difficulties caused in part by Covid lockdowns in China.