Hello, everyone, and welcome to the Prudential plc 2022 half year results call. My name is Seb, and I will be the operator for your call today. There will be an opportunity for Q&A. You can submit your question via the webcast, or if you're listening on the phone, you can press star one on your telephone keypad to submit a question. I will now hand the floor over to Mark FitzPatrick to begin. Please go ahead. Thank you. Welcome everyone to our 2022 half-year presentation from our offices here in Hong Kong. I'm Mark Fitzpatrick, and I'm joined here in person by several members of our leadership team and by a number of our Hong Kong-based analysts. From the Prudential team, we have James Turner, our Group CFO, and Avnish Kalra, our Group Chief Risk and Compliance Officer. We also have the managing directors of our three strategic business groups. Here with us in the room is Lilian Ng, responsible for Chinese, Hong Kong and Taiwan, as well as overall distribution capabilities. Joining us remotely from Singapore is Dennis Tan, who heads up Singapore, Thailand and Vietnam. Solmaz Altin, who's responsible for the remaining country markets, including Indonesia, Malaysia and the Philippines, and he also has responsibility for our digital and technology functions. Wai-Kwong Seck, Chief Executive of Eastspring Investments. I appreciate this is a very busy day for many of you, and we'll close this session just before top of the hour. Very briefly, before we go into Q&A, just a couple of key points I'd like to highlight from the half year. Firstly, it was a resilient set of results. APE sales were up 9% to $2.2 billion, reflecting diverse source of growth due to our geographic footprint, product mix and distribution channels. APE sales in Southeast Asia and in Greater China are now both at about $1 billion. New business profit was flat year on year when you exclude economic effects, and it was down 5% to $1.1 billion, following differences in country and channel mix and the impact of higher interest rates. The jaws could be attributed approximately a third to each of those factors. IFRS group operating profit was up 8% to $1.7 billion. Our resilient operational performance is testament to our multi-channel, digitally enhanced distribution platform and our strong franchise across Asia and Africa, where we are top three player in 11 Asian life markets. The quality of our business is strong, as evidenced by the high customer retention rate that we published today. We are looking to drive growth through a focus on operational delivery, writing quality health and protection business, and by investment in people. Therefore, our management priorities are around distribution, digital, business quality, people. In distribution, it means we're expanding our distribution channels and driving higher productivity across both our agency and banker channels. In digital, we are embedding digital into our sales and servicing process to deliver a superior customer experience and to enhance operational delivery. We are focused on maintaining the quality of our business, and we continue to build leadership and strength and building capabilities of our people through ongoing training and development. We're also very pleased to announce two new non-executive directors today as well. We are confident of continued growth. Customer demand continues to be strong. Our index monthly sales were up 13% in July this year. Our latest Hong Kong border survey, which is included in the appendix to the slides, continues to show very high intention to purchase insurance. Importantly, we see that long-term structural growth drivers remain intact, driven by urbanization, growth in middle class and their corresponding wealth, and rising demand for health and protection. We remain confident that Prudential has the financial resilience, capital strength and capability to meet the growing health and saving needs of our customers in Asia and Africa. With that, Patrick, I thought let's start the Q&A session. Maybe we can start with the questions here in the room in the first instance, please. Thank you. Maybe we can start with Michael. Well, thanks for letting me ask. My name is Michael Chang from CGS-CIMB. I've got two questions. Firstly, it's on the China business. It's definitely better than expected. First half NBP was only down 4%, and that's off an extremely difficult base for last year. Could you shed some light on your view of the operating environment on that front? Maybe you can give some figures on trends, how the first quarter and second quarter are doing, as China exits the outbreaks. How is July doing on that front? And what are you doing to continue to outgrow the industry? Secondly, on the Hong Kong business, in terms of the fifth wave, obviously a very tough one quarter. Since then, things have improved in terms of COVID cases. How's the business momentum of the domestic segment since then? Thanks. Okay. Michael, thank you for that question. Let me start off, and then, Lilian, I'll hand over to you for a little bit of extra color, please. In terms of our business in China, we're very pleased with how it performed this half. A key component, a key differentiator in our performance was undoubtedly the multi-channel distribution that we have. We have strength in agency, we see strength in bank insurance, but also the very broad footprint we have in mainland China. In terms of 99 cities, in terms of 6,000 outlets. That meant most of the business was able to continue performing, even if some cities were at various stages of lockdown or restricted movements. That undoubtedly was a very important component. I think we've also been very focused on the quality of our agents in terms of additional training. We've seen significant improvements in terms of the number of cases that each agent is working through, and a significant increase in terms of health and protection policies that we're seeing coming through. We think these are important drivers, important competitive advantages, because it takes time to build up bancassurance relationships. We think we have those in abundance throughout China. Lilian, why don't you kind of any further comments on Chinese Mainland and then maybe a little bit on Hong Kong domestic, please? Hong Kong? Okay. Thanks, Mark, and thanks for the question. Obviously on the Chinese Mainland, I think the reason why we can continue to outperform is a combination of our wide geographic footprint as well as the multi-distribution. Basically, we are where the customers are, and we can serve them the way that they want to be served, whether it's through our agency or our bancassurance channel. Just touch a little bit on our agency capacity and capabilities. I think the regulator is focusing more about sales practices, and I think there's now a draft in place in terms of looking at how does an insurance company and the sales agencies drive consumer conduct. I think you'll be very happy to hear, for our agency force, we are already embarking on that, the role that they play. We're very selective in who we recruit, as well as how we equip them to actually do the right thing for our customers. As a result, we've been able to see an increase in our, what we call the productive and the elite agents month-on-month. Since the beginning of this year, as you appreciate, I think the COVID has sort of some impacting on our recruitment momentum, but we're seeing that quality coming up. On the bank insurance side, the beauty we have actually with our bank insurance platform, other than our capabilities, is I believe in terms of our digital technology platform that we can actually hook up with a bank partner quickly. Also address the double recording which is coming through, you know, in terms of financial advice. You have to do video and sound recording. These are capabilities that we can, and as a result we can onboard a bank partner and the branches quickly. On top of that, obviously continually evolve our product offering. Overall, we do see a lot of opportunities in China, and we believe we have the capabilities and continue to refine in that area. Now into Hong Kong, which I think on the domestic segment, obviously Hong Kong is a very resilient place. I think there's two things that we need to recognize in Hong Kong. Actually, this is promoted by obviously the new administration of the Hong Kong government, as well as from the Chinese Mainland government, is that it continues to be seen as an international financial center. One thing that we need to call on is Hong Kong is also seen as an international healthcare center. These are the two reason why we can actually continue to grow in the domestic market and when the border opens, so we continue to believe there will be a lot of appetite or pent-up demand from MCV customers coming through. Just on the domestic front, the purpose we are doing is we're driving more health and protection through our agency force. You can see in some of our data that, you know, we are now driving our product mix to an area where the product mix is just on its own is adding 11 points to the new business margins for the agency product mix. On our bancassurance piece, we continue to have a very good partnership with Standard Chartered Bank. I think I have to say, we probably one of I think the only one strategic partnership actually continue to offer a whole range of products, including savings and protection. Whereas we know a lot of our bank partnerships is purely saving or spread products. That's an area that we continue to work on. Maybe to Thomas next. Thank you. Sorry. Thomas Wong from Goldman Sachs. A couple questions if I can, follow on that China question. In terms of distribution, we're seeing struggles within the—among a lot of Chinese internal agency side. Prud did a lot of new bank insurance relationship. Just want to pick your brain in terms of how you think about medium to long term, how that dynamic or balance between the two channels, how do you see that developing? The second question, if I can, also on the capital side, just, do we have some update on the IFRS 17 implementation? How potentially that impacts our financials for next year? Thomas, thank you. In terms of distribution on mainland China, I think what we've seen is a real shift towards quality. You've seen the number of agents in the market come down, a real focus in terms of quality, and you're seeing the regulatory direction from CBIRC focusing on quality of agents as well. That plays to our strength, and we think that supports who we've been and the space of the market that we play in. We do think that bancassurance is going to continue to be a very important part of distribution as well in Chinese Mainland. We have developed it in such a way that the margin is very respectable, about 40%-41%. Therefore, it's a meaningful contributor. As Lilian says, we have the wherewithal to be able to link up with new banking relationships very significantly. In Chinese Mainland, we have 55 banker partners, and we have access to over 6,100 bank outlets. It is a capability and a strength of scale and of size as well, which is important. Both banker and agency will be important. I think the whole industry will shift towards a more professional agency force, and that's very much in line with where we're at. Then on IFRS 17? Thomas, thank you. Thank you for my first question as CFO. In terms of IFRS 17, look, we've given you a slide in the deck which sets out the timetable and some of the key points. In terms of impacts, really the key issue is that the methodology is still being defined in a number of areas. What we will do is we'll do a market update in Q2 2023, where we'll go through the impact of IFRS 17 and bridge between IFRS 4 and the new accounting basis. Really the important thing to remember is this is an accounting basis. It doesn't change the economics of our business. It doesn't change our strategy, our dividend, our cash generative basis, or indeed, our capital strength. It is clearly important. It's front of my mind in terms of ensuring we get an optimal outcome. The key underlying economics of this business are not impacted by IFRS 17. Perhaps we could pass to Edwin, and then we'll come down. Thank you. I'm Edwin from CLSA. If I can switch gear to non-China markets. My first question is on Singapore. I noted that last year, and actually, for the first half of this year, Singapore business performed quite well, and the momentum seems to be much better than your peers. Just wonder, could you share some color behind the strong momentum for your Singapore business? And should we expect such momentum to continue in the second half? The other question is going back a little bit to the Hong Kong business. I understand the economic assumption may have some impact on the new business profit for Hong Kong in the first half. Is there? Is it possible to share with us, you know, without such economic assumption change, what would be the new business profit change for Hong Kong market in the first half? Thank you. Sure. Edwin, thank you. I'll start off in Singapore and then Dennis I'll hand over to you for a little bit of extra color, seeing as you're on the ground in Singapore. Then maybe, James, you could cover the Hong Kong NBP margin- Yeah. -economics. Thank you. In terms of Singapore, I think the team have continued to do fantastically well. The agency has performed well. We've got nearly 20% of our agency base is MDRT. That's continuing to do well. I think with the banker channel and the customer appetite over the course of the last six months, bank has come through very strongly. And we've seen a real appetite for from high net worth clients for long-term policies that really look at savings and legacy protection. Maybe Dennis, I could hand over to you for a little bit of extra color, please. Thank you, Mark. I think in the Singapore context, given the reopening and things being more endemic in nature now, there's been a lot more activities on the ground. We see that a lot more in second quarter of this year as compared to the first quarter. In that regard, a lot more customer engagement, a lot more face-to-face activities are being rolled out, both in the bank channel as well as through our large agency force. That continues to support a lot more of a business generation here. The other item is actually with the pandemic, there's been a huge adoption in terms of our digital tools. Despite the reopening now, the agency force continues to really use the digital tools in terms of the video engagements and video tools to sell. I think that continues to help us increase productivity. Definitely we'll continue to see this, carrying through in terms of momentum into the second half of this year. Back to you, Mark. Thank you very much, Dennis. James. Edwin, listen, thank you. In terms of economic impacts in Hong Kong, in terms of margin, it had about a 25.1% hit in terms of the NBP margin, and that equated to about $57 million in terms of NBP. Let's go to Jenny. Hi, management. This is Jenny from Morgan Stanley. First of all, thank you for organizing this on-site event. I think it's very good to see management in person and also our peers. Maybe two questions from me. One is still on China. I wanna ask about management's view on China's retirement market. You know, on the asset management side, I think there's a lot of changes in regulation, removal of, you know, foreign ownership cap. You know, is there any, you know, further thinking or strategy planning there in China? Also on the insurance side, we've seen some new business model in China. You know, they're doing financial products plus retirement services, like the senior care homes. It's getting quite popular. A lot of local peers, your key, you know, competitors, they're all trying to explore that business model. Just wanna hear your view on that. Maybe second question is on Indonesia. Used to be a very important market for us. It has been struggling a little bit. We just wanna hear management's maybe, you know, some comments on, you know, how the market is doing. You know, do we think it has turned around? You know, we have done some changes there. We have a new Sharia license. You know, how is that going to sort of develop? Also in the bancassurance side in Indonesia, you know, is there anything further we can do to strengthen the distribution there? Thank you. Okay, Jenny. There's a lot in there. Let's start with China. I'll make some opening comments, and then Lilian, maybe over to yourself, and then Solmaz, I'll start on Indo and then hand over to yourself if that's okay, please. Thank you. In terms of China, the retirement market, it is a huge opportunity. We think Pillar three is a huge opportunity for the market, and it's great that consumers and regulators and on Chinese Mainland are spending more time focusing on the need to save for retirement. It's a need I think that we're seeing throughout the world. It's great to see it really being an area of focus in in Chinese Mainland. I think the opportunities we have within the CPL are very real. CPL, our China business, has a 100% owned asset management company that effectively provides it all the support and some of the new regs effectively would link into that entity. But Lilian, why don't I ask you to- Okay. Provide a little bit more color, please. Thank you, Mark. I think, as you said, I think these pension opportunities in China is huge, right? So I'll join into CITIC- Prudential Life there. As Mark mentioned, we actually have a wholly owned subsidiary called Insurance Asset Management Company. I think there are probably around about 30+ insurance asset management companies in China, and about a third of that are what we call joint JV or foreign-owned. So we're very proud to say that actually we're one of the top three or four JV IAMC in the market. So we have capabilities in that AMC business. Now, going back to the pension opportunities, I think where we definitely can play is actually in the Pillar three, which is the private and personal pensions. Actually, CPL is one of the first to actually engage in the pilot where CBIRC allow certain insurers to actually pilot the retirement products in the southern provinces. Obviously, as a learning regulator, CBIRC continue to work with those pilot insurers to improve the product offering. The second thing where we are actually quite excited is actually it's formalized in the revised regulation, just came out this week, is that we can also now with our IAMC participate in the asset management of pension assets for other providers. So that's an area that we're very excited and I think we can tap into that. So hopefully that addressed our capabilities already on the ground to capture those opportunities. I think the second one you mentioned is about the insurance products. I think the way we actually look at insurance product is we look at it from a customer proposition. We offer what we call the retirement savings insurance product. At the same time, what we have what we call value-added services. Back to your point, we actually, for example, offer, for example, engagement with one of the property developers so that we can, you know, engage with them to purchase a retirement home in advance in Hainan of all places. We've also engaged with one of our health management company called [Xinlai Yijia], and that's offering, you know, healthcare management services. This is how we provide, you know, those value-added services for our customers who are planning for retirement. All that you see is something that we've actively engaged in. Then on Indonesia, Indonesia is a very exciting market for us. Very, very exciting. We've been very busy. The team have been very busy this year. We launched the new Sharia business, the first in the world to launch a standalone Sharia business in April, and that's come along really, really well. We're also very pleased in terms of the broadening out and the continued upskilling that we're doing in terms of our agency, but also the element of our product range. We spent a lot of time developing and expanding the product range, and therefore, that's actually resonating with a lot of customers, and especially at the moment when COVID is still very, very real in some parts of Indonesia, making sure that there are policies that are available for those customers, as well as getting into the SME market is one that we got into fairly recently, and we're seeing some very encouraging signs from that. Solmaz, why don't I hand over to you and just allow you to provide a little bit of extra color, please? Thank you very much, Mark, and thank you very much for the question. We will see Indonesian insurance market, which has been hit hard indeed by the pandemic. As the country opening up, the situation will become better. Let me also point out a few things on the questions that you mentioned on Sharia and bancassurance. On the Sharia side, indeed, we have successfully separated our Sharia business. We are currently the market leader in the Sharia segment with 30% market share, and we have 160,000 agents enabled to be operating and selling Sharia-compliant products with that new entity. We have an amazingly strong position in the Sharia segment. Our distribution power in Indonesian conventional business is extremely strong. We have almost 50% of all agency population is with us. As the country opens up, this will give us the opportunity to increase also sales again, with banca being flat and AP sales and agency was a bit down. With bancassurance overall, we do see some progress with our existing bancassurance partnerships, albeit from a slow base. We will certainly look into other opportunities that might present themselves to us over the next year or so. We will certainly also be cautionary in terms of the transaction values and the price we will be willing to pay for that. Back to you, Mark. Thomas, thank you. Thanks for those questions, Jenny. I think we'd like to go to the operator, and we'll have a question from some of the international sell side, if that's okay. Thank you. Our first question comes from Andrew Baker at Citi. Please go ahead. Great. Thanks for taking my question, guys. Just two for me, please. Are you able just to provide an update on where you are on the Macau license registration process and then, when that does come into effect, what impact you're expecting on both AP and new business profit from Macau? Just secondly, on the group-wide solvency ratio. Obviously, there's a lot of moving parts, and it now includes the RBC and the C-ROSS changes. Just wondering when you think you might be in a position to provide us with more information on what you might consider an appropriate target range for that ratio. Thank you. Andrew, thank you for those questions. I'm pleased to hear that James will have to deal with the target range question rather than me having to deal with it in the past. In terms of Macau license, we continue to engage with the regulators. As soon as that is open, we'll expect to be able to begin business very shortly thereafter. A key component, clearly, of Macau is not only the element of Macau itself, but also the visitors coming down from Chinese Mainland and the opportunity of that. While the border with Hong Kong and Chinese Mainland remain shut, that provides a useful conduit to be able to tap into some of that demand that undoubtedly is there for multicurrency, for critical illness protection and the like, that can be effectively provided through what would be a branch of our Hong Kong business. So that's what we would expect to happen once the license gets approved. James, in terms of GWS? Andrew, thank you. In terms of the GWS ratio, as we state in our disclosures, we haven't set a maximum limit on the coverage ratio, because the GWS solvency position, which is a key metric for assessing our regulatory capital, but it does include elements of capital that cannot be converted into cash immediately. A classic example would be contributions from the with profits fund. Where we've guided to is free surplus. I think that's a much better metric in terms of understanding the shareholder capital available for distribution. It's also the primary metric we're using to assess the group's sources and uses of capital. What we have done is we've given you a risk appetite level of 150%. That was the new piece that we've added in terms of those moving parts that you referenced. Thank you. Operator, should we have another call from the international callers, please? Next question comes from Farooq Hanif from JP Morgan. Please go ahead. Hi, everybody. Thanks very much. I'm just going back on Andrew's question on GWS ratio first. What does that risk appetite mean? If we take free surplus ahead of that, does that basically mean, you know, this is capital you feel like, I mean, how much of that do you think you'll need to retain for growth, and how much do you think could be part of some sort of future distribution, either through dividends or buybacks? If you could talk about that or at least tell us when you might consider talking about that. The second question is, you've got this 13% growth momentum that you talked about in July in your slides. Can you give us a bit more of an idea of where this is coming from, where growth is accelerating? Quickly, third question is, you know, what are your kind of latest thoughts on dividend growth generally, and, you know, given the momentum that you've seen in free surplus? Thank you. Do you wanna? Yeah. Yep. Thank you. Okay. Farooq, thank you. In terms of GWS and risk appetite, and really the question is why do we pick 150? Clearly, we carry out a lot of internal stress testing to derive this buffer. We considered all the considerable risks to the GWS capital position and also the potential mitigating actions. Holding this level of buffer over the GPCR minimizes the probability of regulatory intervention even after a very large movement. I'd kind of draw your attention to the fact that We've given you the pro forma GPCR level at the beginning of the year of 320, and even after the significant disruption that we faced in the first six months and market volatility, we're reporting a 317% at the half year. I think your second question really is about how to think about kind of firepower, it's probably best, I'm not going to give a number, but to tell you how I think about it. First, I'll refer you to our free surplus of $8.6 billion, and there's a slide in the CFO appendix that covers that. That's the best guide to distributable surplus because this is the stock in excess of 100% of GPCR. Clearly, we are not net capital generative, so all else being equal, that capital stock will increase over time. That stock does include $2.1 billion of Holdco cash, and clearly, we need to maintain prudent levels of liquidity. Also conscious of the scale of our organic opportunities, the attractive IRRs that we're able to achieve and we're able to invest in. We'd also need to look at all the necessary stock at one time. Wouldn't necessarily want to pull it up from the businesses. You know, classic example is when we invested in TTB in Thailand, you saw that was a $750 billion investment. About $500 billion came from the central resources, but we used the stock in the business units to pay the balance. That's how we think about free surplus. Clearly, there's also the fact that we're capital generative and that we look at things like our debt equity ratio, where we're at the bottom end. Hopefully, that gives you a sense of the strength of our capital position and our financial flexibility through. Farooq Hanif, good morning to you. Thank you. In terms of the growth in July, I think it was. Morning. about 10 markets registered year-on-year growth. It's, you know, some doing stronger than others across the board. I'm pleased it's quite a broad brush in terms of performance. James, I wonder if you could pick up the div question. Sorry, could you just repeat the dividend? I didn't hear the second. The OFSG and the trajectory for dividends given the OFSG. My question was, in light of your strong free surplus, in light of your growth in kind of generation of free surplus, what's the trajectory here in dividend growth, full year dividend growth? No, listen. Thanks, Farooq. We announced a new dividend policy last year, and we're linking that through to the, as you say, to that growth in free surplus, obviously reflective of normalized central costs, et cetera. You would expect to see it grow at the same level as our growth in free surplus aligned with that dividend policy. Thank you. Thank you. Operator. Thank you so much. Thank you. Operator, we'll go to another question from the phones. Thank you. Our next question is from Greig Paterson at KBW. Please go ahead. Morning, can you hear me? Hi, Greig. We can. Yes, can you hear me? Thank you. Yes. Just two questions. Wonder if you could give us an update on your ambition to increase your stake in the Chinese JV. The second thing, there seems to be a sort of retail property crisis going on in China, and it seems to be escalating, maybe picking up from supply chain issues from the one big insolvency we had last year. I was wondering if that's having any detrimental or will have any detrimental impact on your volumes. Thank you. Greig, hi. Thank you. So the stake in CPL, I think we've made it clear to yourselves as investors and to specify our appetite to be able to buy more if that opportunity arose. That being said, our time and effort, and Lilian as chair elect, all our time and efforts are being absolutely committed to try and help that business grow as quickly as possible, grow into the footprint further. You've seen the great job that the team have done over the course of this half, and we look forward to seeing them continue. Just to contextualize vis-à-vis the industry, CPL outperformed the industry four times in the first six months of the year, so very, very strong performance. That's really what we're gonna keep driving and keep focusing on. Nothing new on that, on that side, Greig. In terms of the retail property piece, actually, I suppose that's gonna be a broader economic and macroeconomic piece for the Chinese economy. That being said, you know, the inflation print that was done for China this morning at 2.7% CPI isn't, I think, causing any concerns in the market. The core inflation is running at 0.8%. Chinese consumer is not driving up demand significantly. We do believe that there is an opportunity to continue really focusing on the health and protection space, which is what we've been doing for a number of years. I think COVID and the unpredictability of COVID outbreaks around the world has just continues to remind customers of the need to get some protection should they suffer from COVID or should, unfortunately, somebody die from COVID. At this stage, not seeing that there's gonna be a major direct impact and the impact from ourselves in terms of our balance sheet is fairly minimal. Thanks, Greig. Thank you. To that end, I've got a question on the web which I'll just read out. Part of it's already been answered, but Nasib at UBS is asking, "What opportunities do you see in the bancassurance space, and which markets?" A question for Lilian, which is, "How would you expect to run sales from the branch in Macau once that license is approved? Okay. Thank you for that question. In terms of the bancassurance space, one of the areas that we have said for a little while now that we continue to explore and consider opportunities to close the gap is in Indonesia, where the market is a bit more balanced than our business. Our business is predominantly agency, and the market is a little bit more balanced between agency and bancassurance. We're very focused on various opportunities to try and pick up a bancassurance deal in Indonesia, if possible, as Solmaz said a short while ago. That's probably the main component. Our big, you know, kind of regional bank insurance deals are pretty much kind of locked up for many years, and we're very pleased at how well the processes are progressing. We continue to keep an eye on, you know, individual opportunities that may arise, ensuring at all times that we're very disciplined. We don't wanna overpay, and we wanna make sure the terms and conditions are appropriate for what we do in the bancassurance space. Lilian, then on Macau. Okay. I think as Mark mentioned, we are applying for a branch license of Prudential Hong Kong, so Macau will operate as a branch. A lot of the infrastructure and operations will be done through in Hong Kong. In terms of the sales model, obviously we'll continue to put in a multi-distribution. We actually already have capability in Macau already in our rep office setting up, for example, recruiting corporate sales service people to service the agency channel. That's one area. Actually, interesting enough on the banker side, we are already starting to talk to some of our bank partners that are in the region that have a branch in Macau. It will be in the same way that we actually run sales in most of our markets. Thank you. Operator, let's go back to one of the international calls, please. Thank you. Next question is from Andrew Crean from Autonomous. Please go ahead. Good morning, everyone. Can I ask three questions, please? Firstly, could you give a sense of how you see the opportunity when the border opens in terms of sales and new business profits relative to the levels that you were doing in 2018? Secondly, coming back on the first questions, could you give us the growth rate in China and Hong Kong, new business profits or APE first quarter and second quarter, so we get a sense of momentum. Thirdly, coming back on this capital position, could you tell us in terms of the war chest for acquisitions, say like China JV, how much you've got, either in terms of the amount of free surplus available for that, or in terms of the Holdco cash? It is important, I think, that investors understand what your firepower is. Okay. Andrew, let me start off with the border opening piece, and then I'll hand over to James for the other components. In terms of the border opening vis-a-vis the previous periods when we had significant volume coming through, and I think pretty close to about $100 million per month was effectively coming through of new business profit. From the research that we've done and from the surveys that we've done, and interestingly, it's not just surveys that we've done, a number of other houses do these surveys of people in Chinese Mainland asking about their appetite and propensity to travel down to Hong Kong, and then when they hear what they might do. We're seeing an uptick, actually, in appetite for people to travel down to Hong Kong. We've seen an uplift in terms of people's propensity to purchase, especially those who are in the 45+ age group and those who have maybe about $100,000 or more to be able to invest. It's a significant uptick. We think that demand has not gone away. It's pent up in that, maybe the very high net worth individuals in Chinese Mainland have ways to be able to move some of their wealth around the globe. Our population, our audience rather, is very much the affluent, the mass affluent, and therefore, they really need the border to be open to be able to benefit from the multi-currency opportunities, to be able to benefit from the critical illness cover, and to be able to access the Hong Kong healthcare system that is so well known and so well respected. Again, that's something that we explored in the survey. Where people said, for minor illnesses, very happy to deal with local hospitals. For anything significant, they'd like to come down to Hong Kong, given the brand that Hong Kong has. I think the border opening, so much will depend, Andrew, on how the border opens. I think it's unlikely the border is just gonna be flung open. Our expectation is it's more likely to be a gradual opening and likely to be GBA in the first instance that may get a broader opening. Just to remind everybody, the GBA population size and scale, it's kind of, you know, size of about 70 million people and a scale a bit like South Korea in terms of an economy. So it is a very sizable opportunity for us, for the market and also for Hong Kong. Because at its height, we had 1 million visitors a week coming down from Mainland China. While I'm in Hong Kong at the moment, you see it's, you know, it's got a lot more energy about it. People are very enthusiastic, given quarantine rules are being restricted. It'll be great to even better when the visitors come down. James. Andrew, thank you. I'll do the APE one first, in terms of Hong Kong and China. In Hong Kong, it was split pretty much 50/50 in terms of Q1, Q2. In China, in terms of APE, it was weighted much more to the first quarter, and 3/5 in the first quarter. In terms of your second question, in terms of where we are on- Sorry, the growth rates. It's really the growth rates rather than the split quarter to quarter I was after. Okay. In terms of Hong Kong, the growth rate in Q1 was down about 18%, and in Q2, it was up 19%. In China, clearly in the first quarter, you'll recall that we had the fire sale of the CI products. That's reflected in Q1, where it's down 62%, in Q2, it was up 41%. Okay. In terms of the second question you asked about firepower. I mean, I refer you back to what I said before. It's not appropriate to give a number, but it's best to look at examples. In that Thailand example, the investment into TTB, where we had just over $750 million that we invested. $530 million was from central resources, $240 million was from local resources. That's about in demonstrating that the capital, the free surplus that we hold in the LBUs is important for those investments, and that we are able to call on it when we need to. You're right that we have $2.1 billion of cash in the center. You know, we've been very successful in growing our business and then being able to convert that growth into cash, which ultimately comes up in terms of remittances. We're not looking to remit more than we need, and we've got the financial flexibility aligned with how I described the free surplus earlier to the earlier question. Thank you. Is there another question from the room? Please. Yeah. Thanks. I'm Jian Li from Huatai Securities. My first question is about Mainland China. There's a discussion in the market that the overall demand of insurance in Mainland China is weakening, because people see a huge number of agents are leaving the industry. What's your observation, and what's your future competitive advantage in this market? Secondly is about Malaysia. What's the opportunity in the Takaful business, and what are you going to do to maintain your leadership? Perfect. Okay, thank you for those questions. Solmaz, I'll come to you for the Malaysia Takaful opportunity. In terms of Chinese Mainland, in terms of demand. Undoubtedly, the number of agents across the industry has fallen dramatically over the course of the last few years. I think a large part of that is when you look at what type of business many of those agents were selling, it tended to be very short term endowment type products. That's not really what the CBIRC is looking for the industry to sell. The industry is looking to make sure there's greater protection, and there's more long-term cover rather than short-term investment component. We do think there is undoubtedly a big shift towards quality, and we're seeing that play through. Therefore, I think one of our big advantages in the, in the market is that, A, we've never played in that space where some of the other agents and some other people played with a lot of short-term endowment. It wasn't something that we felt was attractive business or business we wanted to do. We have within our organization, within the management team, a culture and a mindset, and within our agents, a culture and a mindset of actually selling more health and protection products. We do think that that opportunity will continue. We think, again, with our bancassurance footprint, given how wide it is, that gives us a tremendous opportunity. When we move into a new city, a Tier 2, Tier 3 city, it gives us an opportunity to establish a presence almost immediately and be selling through those bank branches while we then recruit our agents locally and while we then actually mature our business locally. We are, I think, very positive about the prospects and opportunities within Chinese Mainland for insurance. CBIRC has made it very clear they're looking for a greater level of penetration than they have at the moment. They spoke about a penetration level of close to 5%. We're well under that as an industry in Chinese Mainland. There's a long way to go, I think, before we reach anywhere near saturation. Solmaz, could we go to Malaysia, please, and Takaful? Yes, of course. Thank you, Mark. Thank you to Huatai for the Takaful question on Malaysia. Well, Takaful is a fast-growing segment in Malaysia and is an important component of our Malaysia APE and MVP overall. The size of the opportunity is actually very huge, with Islam being the most widely practiced religion in Malaysia, with around 60% of the entire population. We with our BSN through BSN Company, we are the takaful market leader with 29% market share as of the financial year 2021. We are also launching new health and protection Takaful products. For example, the product called BSN Sakinah. We launched that in this half year, in the past half year, and this helps us support the very high APE mix of 67% in our Takaful business. We have a strong Takaful agency force, as I mentioned, at 160,000, and we have grown them just in the past half year by another 15% or 19,000. Back to you, Mark. Solmaz, thank you. I think just on that, the Takaful is, it is a huge opportunity, one that we're very excited of. Just for clarity, I think the agents' numbers, Takaful is about 16,000. I think the number Solmaz gave was for Indonesia. The Takaful piece is about 16,000. Yeah. Thank you. Sorry, Andrew. It's James. I picked up the wrong numbers, comparatives. The actuals that I gave you were correct in terms of quarter-on-quarter, but the year-on-year I was picking up a different number. In Q1 in Hong Kong, it was a 17% drop. In Q2 it was flat. In Q1 in China it was a 7% drop, and in Q2 it was a 68% increase. Apologies for that, but just to correct that immediately. Okay. Thank you. you. Should we go back to Michael? I think we've got two more from the phone lines. Yes. It's Michael Chang at CGS-CIMB again. Sorry, James, just on your comment about the second quarter for Mainland China that 68% year-on-year, could you maybe shed some light on what the agency was for 2Q versus bank insurance? I think that ties to what Lilian said earlier on that since the beginning of this year, productive agents have increased month-to-month for every single month. Maybe shed some light on that. Secondly, on the Macau business, obviously as you said, a great opportunity to reclaim some of the MCV related business. Could you shed some light on what portion of the MCV historically maybe came from the Greater Bay Area, the Guangdong region? Maybe that could be some easy wins that could be tapped in the near term. Thanks. Absolutely. Why don't we start with the second question? Okay. In terms of Macau and the Chinese Mainland visitors. Obviously, I think, yeah, Macau obviously there's the opportunity. In the past, what we see, pre-2019, the contribution from the Guangdong area is about a quarter of our MCV business will come from the GBA area. Actually, if you then add it to that, what we call the eastern coastal provinces, right? As you know, right, in China, anything south of that, they're prone to come to Hong Kong. If you add that part, you know, where you go, in terms of Fujian, Shanghai, Jiangsu, that will be like 50% of our business. We expect that's how the flow may come when the border opens up. Thank you. In terms of split in H1, what we saw in China is agency was down 11% and bank insurance was up 28%. That's completely in line with what Lilian was saying earlier. Thank you. Should we go back to the international phones, please? Our next question from the phones is from Dom O'Mahony at BNP Paribas Exane. Please go ahead. Hello, folks. Thanks for taking questions. Three from me if that's all right. First, you highlighted 22 new bank insurance arrangements. I wonder if you could just highlight, you know, which geographies or which big arrangements you would highlight within that, whether there are any particularly meaningful large any arrangements that you could highlight. The second question is on the free surplus generation in the life business. This is very strong. I think it was 18% increase in the expected free surplus generation. It's also well ahead of the outlook for 2022, as presented at full year 2021. I'm wondering whether there are mark-to-market effects within the operating free surplus generation, and if so, how big that is. Then third question, if I look at the insurance margin, very strong. I just was curious as to whether the sort of lockdowns and border sort of COVID-related measures may have reduced claims activity. I think that was something you highlighted in previous periods. For instance, discretionary health claims may have reduced. I'm wondering whether that was relevant in this period, and if so, if you have any idea of how much. Thank you. Thank you. Okay. All right. Lilian, do you wanna give an overview of the new banking arrangements, please, in terms of just the broad geographies that we have? I think for 2022, actually majority of that is actually in China, in the Chinese Mainland. As you know, in the Chinese Mainland, it's an open architecture arrangement. So we've been able to onboard 11 new bank partners in the first half of 2022. So majority of that is new and the rest is actually operating on the existing arrangements that we have with our regional bank partnership. I think we spoke about the Thailand one as well. That's what's adding the value. James, just conscious of time, in terms of the two questions, in terms of FS generation and insurance margin. To be honest, they're both linked. The insurance margin, the 17% increase in the insurance margin benefits from the impact of the adoption of Hong Kong RBC. It's about $200 million above the line, and that goes through the insurance margin. That's why that's up at 17%. If you strip that out, it'd be at the underlying of approximately 6%-7%. Okay. Thank you. Okay. I think we've got Brilliant. Thank you. I think we've got one more call from the international lines, and then we'll close. Our next question then is from Fulin Liang at Morgan Stanley. Please go ahead. Thank you very much. Two quick questions on IFRS. The first one is, as a follow-up on Indonesia. If I look at the operating profit, actually all of your regions will still show like high single-digit or low double-digit operating profit growth, apart from Indonesia. Just wanted to see when are we going to expect to see the turnaround in Indonesia, on the IFRS side. The second thing is on Hong Kong. If I back out your numbers, seems like a majority of the short-term fluctuation came from Hong Kong business, which was a bit of a surprise to me because, in the past, we've been advertising that the majority of Hong Kong's business is with-profit, which means that it's actually relatively stable under IFRS matrix. I wonder actually, is it because of your general account despite a small proportion in Hong Kong? Is it still very large absolute amount? Just what's the reason of that, and also whether do you think that IFRS 17 implementation will change that? Thank you. Okay, thank you. Just in the interest of time, let me just deal with the first one quickly, and then James, maybe you could comment on the second too. In terms of the IFRS from Indonesia, the op profit that is down, I suppose, not particularly surprising given that there's a bit of a lag effect in terms of over the course of the last few years. Sales have unfortunately been down in Indonesia as we've retooled that business. Therefore, effectively what I think you'll see is a continuation of the softness in the Indonesian IFRS numbers until such time as we see the agency performing again at the levels that we are familiar with. Until such time as we see, I suppose, effectively a sustained period of the market being open and agents can interact with customers on a more normalized level. James, in terms of the Hong Kong. You're right. A significant amount of this, the short-term flux is from Hong Kong. That's really reflecting the fact that, as you know, we focus on high quality health and protection business. It's not particularly sensitive to market movements. All of those profits, you're discounting at a higher level. That's what you're seeing in driving that number. In terms of IFRS 17, you'll see a spreading of profits. You know, that's the nature of it. That has both advantages on a with profits business, where they're typically under IFRS 4 back-ended. Clearly under products where they recognize them more up front, they're spread out more along the whole of the life cycle of that product. Okay. Thank you, operator. I'll pass back to Mark, who's got some closing comments. Sure. Thank you very much, everyone. As you can see, we've demonstrated hopefully that our business is delivering quality and disciplined growth, that we have diverse sources for this growth because of the regional footprint, but also our digitally enhanced multi-channel distribution model and a predominant and very strong focus on health and protection and, a very keen focus on execution and delivery. There's plenty more to go for, and we look forward to further progress as the effects, hopefully, of COVID diminish everywhere. With Asian growth generally, higher than in the West, we'll be looking forward to a very exciting future here in Asia and Africa. Thank you very much, everybody, for your time this afternoon and this morning. We look forward to chatting to you in due course. Thank you, operator. You can close the call now.