H1 saw a 20% decline in Own Funds per share, from 372p to 296p, which was at the bottom of the range versus peers, with the biggest negative factor the very weak Swedish equity market (down 29%), followed by spread widening and weaker equity markets in the UK, and spread widening in Holland. The company’s preferred measure, EcV, decreased by 16% to 351p per share. The solvency ratio increased from 152% to 195%, due to debt issuance, with an underlying improvement of 10% points, due principally to the symmetric adjustment, as equity markets fell, and M&A a negative, as flagged. EcV operating earnings were weak at a £21m loss, albeit better than the £32m loss in H1 21. New business profits declined slightly due to the impact of weak equity markets on activity and margins in Sweden, but the bigger impacts were further losses on transfers out in Sweden and higher mortality costs in Holland. In contrast, divisional cash generation was very strong at £60m versus £11.5m in H1 21, boosted by reduced capital requirements as equity markets fell. Underlying (‘commercial’) cash generation of £19m covered the interim dividend by c.1.5x, and gives a better indication of long-term resilience. We have made material cuts to FY22E Own Funds and IFRS profits for H1 performance. Unlike Phoenix, for example, the gearing to equities at Chesnara means that as and when equity markets do recover, the bounce back in Own Funds/EcV should be material. Operating profits must be positive to deliver a return consistent with a greater price to book multiple, in our view. Our previous target price was based on a 6% dividend yield, equating to 0.95x forward Own Funds. We shift this to a 6.5% yield out to FY23E, equating to c.1.2x Own Funds, c.1x EcV, for a reduction in TP from 385p to 365p.