Manulife Earnings: Solid Growth in Asia and Canada Business

No-moat Manulife reported a good set of numbers in the second quarter as growth remained strong while profitability was robust. The company reported core earnings of CAD 1.74 billion or CAD 0.91 per share in the second quarter, versus CAD 1.64 billion or CAD 0.83 per share in the second quarter of the previous year. The second-quarter results equated to an annualized core return on equity of 15.7%. Management has recently increased the company’s long-term target for core ROE to 18%-plus, which is a material positive, in our opinion. The adjusted book value of the company stood at CAD 34.0 per share in the second quarter, up 15% compared with the same quarter in the previous year. Growth remained impressive for Manulife as the firm reported a 17% growth in annualized premiums and new business value grew by 23% on a year-over-year basis. We are increasing our fair value estimate for Manulife to CAD 34 per share from CAD 30 after incorporating the second-quarter results.