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<Research>JPM: AIA PEV Just 0.95x; Div. Adjustment, Regular Shr Buybacks Expected to be Considered to Improve Capital Return
Recommend 24 Positive 31 Negative 26 |
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PRU (02378.HK)/ AIA (01299.HK) are now trading at trough embedded value multiples of 0.5x/ 0.95x P/EV ratio respectively, JPMorgan issued a research report saying. While much of this reflects concerns about economic growth in China, investors are skeptical about embedded value itself and the extent to which it can be monetized, and would like to see the two companies to support their EV by increasing their return on invested capital (ROIC). JPMorgan believed that AIA and PRU will consider this in the coming quarters given the prospects for strong free cash flow growth, capital and cash flexibility. JPMorgan forecasted free cash flow yields to be approx. 5%/ 6% for PRU/ AIA this year. The current forecasted CAGR in AIA's DPS were approx. 8% from 2024 to 2026, with upside potential, and it is believed that AIA has sufficient flexibility to recalibrate its dividend and consider more regular buyback programs after completion of the current buyback program. AAStocks Financial News |
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