FTSE 100 value stocks have been left behind as investors chase US growth and AI winners. But with valuations now compressed across several large-cap names, the question is whether the market is being cautious — or simply overlooking opportunity.
Short-term noise
One stock that I believe is being unjustly discounted today is Asian-focused insurer Prudential (LSE: PRU). The share price is down around 20% in a month.
I would attribute this mainly to renewed scrutiny of cross-border financial flows into Hong Kong from mainland China.
Mainland visitor policies have historically accounted for around 30% of industry-wide life-sector new business, so any tightening naturally impacts sentiment. The aim appears to be to reduce unauthorised cross-border investment activity from the mainland.
This type of headline-driven market reaction is often where opportunities emerge, particularly in a sector that already screams as undervalued, to me.
Consistent compounder
Prudential’s business model is very different from that of a typical domestic insurer. Rather than relying on the mature UK market, it sells life insurance, savings, health, and protection products across some of Asia’s fastest-growing economies.
What makes the business particularly attractive is how it reaches customers. A large proportion of policies are sold through long-term partnerships with major banks, giving it access to millions of customers without the cost of building a vast branch network itself.
That distribution advantage continues to pay off. In 2025, the insurer delivered double-digit growth in new business profit, with broad-based contributions from markets including Hong Kong, Mainland China, Indonesia, and Malaysia.
A major driver has been its bank distribution network. Since 2022, new business profit from this channel has grown at a compound annual rate of 12%. This has been driven by a greater focus on higher-margin health and protection products rather than lower-value savings plans.
Meanwhile, the company has also been improving the productivity of its agency force. Rather than simply recruiting more advisers, it has focused on generating more business from each one through bespoke training programmes.
For me, that’s what makes the recent share price weakness interesting. Beneath the regulatory headlines sits a business that continues to grow, strengthen its distribution network, and improve the quality of its earnings.
What could go wrong?
The main risk is that Prudential’s growth ambitions depend heavily on Asia’s economic outlook.
Rising wealth levels and growing demand for financial products create a compelling long-term opportunity. However, weaker consumer confidence or slower economic growth could reduce demand for insurance and savings products.
Given its exposure to markets such as China and Hong Kong, investor sentiment can deteriorate quickly when economic concerns emerge.
However, when I look at the bigger picture, the opportunity remains enormous. Insurance penetration remains in the low single digits across many of Prudential’s core markets. Meanwhile, China’s population continues to age rapidly. By 2040, around 28% of the country’s population is expected to be over 60.
Wealth creation across Asia is accelerating too. The region now accounts for roughly 30% of global wealth.
With these long-term positive trends in place, I recently added to my position during the share price weakness. I believe the market is underestimating the company’s long-term potential.
Should you invest £5,000 in Prudential Plc right now?
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Andrew Mackie owns shares in Prudential.
