Fintech & EM-focused Analyst, KT Capital Group

Alec Tseung

Fintech & EM-focused Analyst

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Equity Bottom-Up

<ul>
<li>Given Pru's demerger in 2021, it now offers investors a good alternative to AIA to tap into the development and the growth potential of the life insurance sector in Pan-Asia.</li>
<li>AIA has a more balanced business across so many markets in APAC, while Pru skews toward Southeast Asia.</li>
<li>Pru's P/BV is currently at a 30% discount to AIA's and is trading at the same level as the year-end when China just announced the re-opening of its borders.</li>
</ul>


Given Pru's demerger in 2021, it now offers investors a good alternative to AIA to tap into the development and the growth potential of the life insurance sector in Pan-Asia.
AIA has a more balanced business across so many markets in APAC, while Pru skews toward Southeast Asia.
Pru's P/BV is currently at a 30% discount to AIA's and is trading at the same level as the year-end when China just announced the re-opening of its borders.


APAC Insurers Series (#2): AIA or Prudential?

<ul>
<li>Pru is currently trading below its embedded value, with the valuation assigning a negative value for the group’s new business profits.</li>
<li>Given its quality franchise across all key markets in Asia and continued strong new business recovery (to pre-Covid levels), this doesn’t seem to make sense at all.</li>
<li>We would continue underwriting the investment case of Pru in the coming year, with the stock offering significant upside potential. </li>
</ul>


Pru is currently trading below its embedded value, with the valuation assigning a negative value for the group’s new business profits.
Given its quality franchise across all key markets in Asia and continued strong new business recovery (to pre-Covid levels), this doesn’t seem to make sense at all.
We would continue underwriting the investment case of Pru in the coming year, with the stock offering significant upside potential. 


2024 High Conviction: Underwriting Prudential’s Investment Case into 2024

Equity Capital Markets

FWD Group Holdings / Equity Capital Markets

<ul>
<li>Based on HKD 38 offer price per share, FWD has a market capitalization of USD 6.1 billion, assuming the overallotment option is not exercised.</li>
<li>FWD's P/FY'24 pro forma BV represents a significant discount to peers' trading P/FY'24 BV since it has higher-than-peers intangible assets.</li>
<li>P/EV might be a fairer approach as it excludes intangible assets. On this basis, FWD valuation almost has no discount.</li>
</ul>


Based on HKD 38 offer price per share, FWD has a market capitalization of USD 6.1 billion, assuming the overallotment option is not exercised.
FWD's P/FY'24 pro forma BV represents a significant discount to peers' trading P/FY'24 BV since it has higher-than-peers intangible assets.
P/EV might be a fairer approach as it excludes intangible assets. On this basis, FWD valuation almost has no discount.


FWD IPO Valuation: Intangible Assets Is the Key (Vs. Peers)

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fwd-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:34332:1" rel="noopener">FWD Group Holdings (1828 HK)</a> has launched its IPO to raise US$442 million at HK$38.00 per share. The shares will be listed on 7 July.</li>
<li>I previously discussed the IPO in <strong><em><a href="https://www.smartkarma.com/insights/fwd-group-ipo-the-investment-case" target="_blank" data-smartkarma-citation="insights:190939" rel="noopener">FWD Group IPO: The Investment Case</a></em></strong>. </li>
<li>The IPO price implies a discount to peers' multiples. A discount is warranted as FWD is smaller than its peers. FWD is fairly valued at the IPO price. </li>
</ul>



FWD Group Holdings (1828 HK) has launched its IPO to raise US$442 million at HK$38.00 per share. The shares will be listed on 7 July.
I previously discussed the IPO in FWD Group IPO: The Investment Case. 
The IPO price implies a discount to peers' multiples. A discount is warranted as FWD is smaller than its peers. FWD is fairly valued at the IPO price. 


FWD Group (1828 HK) IPO: Valuation Insights

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fwd-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:34332:1" rel="noopener">FWD Group</a>, a pan-Asian life insurer founded by Richard Li, aims to raise around US$442m in its HK IPO.</li>
<li>FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia.</li>
<li>We looked at the company’s past performance in our previous notes. In this note we talk about the IPO pricing.</li>
</ul>



FWD Group, a pan-Asian life insurer founded by Richard Li, aims to raise around US$442m in its HK IPO.
FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia.
We looked at the company’s past performance in our previous notes. In this note we talk about the IPO pricing.


FWD IPO - Valuation Down but Its Difficult to Get Excited About It

Hong Kong

Prudential Public Limited Company provides long term savings and protection products. The Company offers life and health insurance for long term business including asset management services. Prudential serves customers in Asia and Africa.

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Prudential (2378 HK)

APAC Insurers Series (#2): AIA or Prudential?

Pru’s recent correction offers investors an opportune window to buy into its premium franchise (vs. AIA), although both stocks provide investors...

Alec Tseung

2024 High Conviction: Underwriting Prudential’s Investment Case into 2024

Prudential plc's share prices have gone up by c. 40% in London and 50% in Hong Kong YTD. The thesis we highlighted in this note remains largely...

Alec Tseung

FWD IPO Valuation: Intangible Assets Is the Key (Vs. Peers)

FWD has higher-than-peers intangible assets. Hence, using embedded value might be fairer than book value to assess its valuation vs. peers. On a P...

Alec Tseung

FWD Group (1828 HK) IPO: Valuation Insights

The IPO price implies a discount to peers' multiples. A discount is warranted as FWD is smaller than its peers. FWD is fairly valued at the IPO price.

Arun George

FWD IPO - Valuation Down but Its Difficult to Get Excited About It

FWD Group, a pan-Asian life insurer founded by Richard Li, aims to raise around US$442m in its HK IPO. In this note, we talk about the IPO pricing.

Sumeet Singh

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52-week Range

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