Prudential Plc Is Dealing With Some Near-Term Challenges, But The Long-Term Growth And Return Potential Remain Attractive

 

Between COVID-19 and some concerns about the Chinese financial system, this has been a rougher stretch for companies doing business in Asia’s insurance markets. Even so, Prudential plc’s (PUK) performance has been quite a bit weaker than I expected at my last update, with the shares down about 25% and lagging AIA (OTCPK:AAGIY) by close to 10%, while also lagging other regional players like China Life (LFC) and global operators like AXA (OTCQX:AXAHY).

Given Prudential’s greater dependence upon locked-down Hong Kong, not to mention the uncertainties related to major management changes, I can understand the underperformance to a point. That said, with the shares trading at what I think is a substantial discount to fair value, the longer-term rewards for a company leveraged to double-digit growth in Asia look worth further exploration.

 

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Prudential Plc Is Dealing With Some Near-Term Challenges, But The Long-Term Growth And Return Potential Remain Attractive