Goldman Sachs: Prudential and AIA valuations are attractive, and the stock price pullback provides a buying opportunity

Goldman Sachs published a research report indicating that Prudential (02378.HK) and AIA (01299.HK) saw their stock prices drop by 8% and 4% respectively last Friday (13th). Investors mentioned a combination of factors including Manulife Financial (00945.HK) reporting weak sales for Q4 2025 on February 12, as well as concerns over disruption from artificial intelligence.

The firm believes that the direct correlation drawn from Manulife's performance is limited, as the weak sales for Q4 2025 are influenced by a high base effect and regulatory changes that have disrupted the brokerage channel. Compared to Manulife, AIA and Prudential have a much lower contribution of annualized new premiums from the brokerage channel, thus they are less affected by adverse factors from that channel.

Regarding concerns over disruption from artificial intelligence, the firm acknowledges the potential for future disruption but emphasizes that agency sales focus on products with complex policy terms, long premium payment periods, and/or large premium amounts. The firm believes these products are less likely to be affected by artificial intelligence disruption, as customers value interpersonal interaction.

The firm believes the narrative of sustained growth remains intact, with most disruptions related to the COVID-19 pandemic now in the past. At current valuations, the firm sees an attractive risk-return profile and reiterates a "Buy" rating for AIA and Prudential, with target prices of HKD 96 and HKD 150 respectively