AIA Group 1299

[winston]

vested

DBS Chops 2022E AIA VONB to -5% YoY, Rating Kept Buy

AIA (01299.HK) is sufficiently prepared for further business expansion as the company targets to grow its VONB by 5x by 2031, reported DBS.

Factoring in the 1H22 results, the broker reduced the 2022-23E VONB growth for AIA to -5% and +16%, respectively.

The stock was restated at Buy, with its target price lowered to $118.

Related News - C Suisse: HK Eases Quarantine Rules for Inbound Persons; CATHAY PAC AIR, AIA, PRU Favored

DBS highlighted that the market has yet to factor in the additional value from the China Post Life investment, which is expected to fetch an additional income of $4 per share for AIA.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... t-news/HK6

[winston]

vested

Lessons from the past

We think AIA’s P/EV falling to >2 s.d. below its post-2017 mean suggests investors no longer expect strong future growth for its mainland China unit.

But strong mainland Chinese insurance demand can be tapped indirectly via Macau. We also remain confident of China’s long-term growth potential.

We also analyse past periods of AIA’s P/EV trough multiples post IPO. We conclude AIA has been oversold & advise buying on current price weakness.

Reiterate Add rating but lower TP to HK$88 on broadly lower FY22F-24F EPS & VONB due to adverse investment markets & currency movements.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 15E3D4524E

[winston]

vested

AIA(1299)

Analysis：

AIA is the largest Pan-Asia independently listed life insurance group that covered 18 market in the world.

For the six months ended 30 June 2022, Value of New Business (VONB) of the group amounted to USD 1.536 billion, representing a decrease of 13% YoY.

Operating profit after tax amounted to USD 3.223 billion, representing an increase of 4%.

Net loss affected by negative investment return, amounted USD 0.571 billion loss.

Lee Yuan Siong, AIA`s Group Chief Executive and President claimed that sales momentum improved in the second quarter, and the Value of New Business (VONB) amounted a growth in June.

In addition, Hong Kong implemented 0+3 q uarantine arrangements for inbound persons from overseas places and Taiwan, it enhances business activities.

We expected that the society will return to normal slowly by lifting epidemic prevention policy, then the Value of New Business (VONB) growth will be rebound.

Strategy：
Buy-in Price: $69.00, Target Price: $75.20, Cut Loss Price: $65.50

Source: Phillips

[winston]

vested

AIA(1299)

Analysis：

While sales activity in the second quarter for AIA China was substantially affected by stringent containment measures in Shanghai, Suzhou and Beijing, AIA (1299) achieved positive VONB (Value of new business) growth across other geographies such as Hong Kong, Malaysia, India, Indonesia and the Phillipines, mainly attributable to its strategic partnerships with leading banks in those regions.

The Mainland Chinese life insurance market remains significantly underpenetrated and offers tremendous growth potential for AIA in the long run.

It continues to make strong progress in geographical expansion and its new branch in Wuhan, Hubei province, commenced sales in the first half, making a strong contribution to the excellent VONB growth from its new geographies.

In May, it received regulatory approval to prepare a new branch in Henan, the third most populous province in Mainland China.(I do not hold the above stock)

Strategy：
Buy-in Price: $66.00, Target Price: $71:00, Cut Loss Price: $63:00

Source: Phillips

[winston]

vested

HK difficulties to persist

We see HK going from a tailwind to headwind for both VONB (due to margins and agent difficulties) and net profits (due to non-operating items) in 2H22F.

HK VONB headwinds are driven by increased competition, shorter duration products, a difficult time for agents, a high base and Macau lockdowns.

Reiterate Add rating. Slight TP cut to HK$83 due to lower FY22-24F VONB.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... B8E0F115A7

[winston]

vested

AIA 3Q VONB Grows 7% on CER Basis

AIA (01299.HK) -0.150 (-0.252%) announced that, for the third quarter ended 30 September 2022, the value of new business (VONB) elevated 7% YoY on a constant exchange rate basis to USD741 million.

On an actual exchange rate basis, the VONB lifted 1% over the period.

Dividend History
Announce Date Event Particular
2022/08/25 Interim D:HKD 0.4028
2022/03/11 Final D:HKD 1.0800
2021/08/17 Interim D:HKD 0.3800
2021/03/12 Final D:HKD 1.0030

Related News: C Suisse Estimates AIA's Fair Value at $63 under Extremely Stressed Scenario

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... t-news/HK6

[winston]

vested

Now you see me, now you don’t

AIA confirmed that its sizeable derivative loss booked in 1H22, which we expect to widen in 2H22F, will be reversed in FY23F under IFRS 17.

It is also a positive that all its major regional markets delivered VONB growth in 3Q22, with mainland China’s +6% yoy still much better than larger peers.

While 4Q22F VONB growth is challenging due to a very high 4Q21 HK base, we are encouraged by Macau’s continuing ‘excellent’ sales growth from MCV.

Reiterate Add rating. Unchanged TP of HK$83. Still our top sector pick.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 7094671BBA

[winston]

not vested

Remember the good old days?

We raise our FY23F–24F VONB by 5-21%, primarily driven by HK and China,as we factor in Covid-zero policy changes and border re-openings.

Margins and premium volumes are tailwinds that can drive FY24F–25F VONB growth, in our view, with FY24F’s 29% growth the fastest since FY11.

We assess 21–76% further valuation upside can exist under various scenarios (see Figs 15–16).

TP raised to HK$104. Remains our top sector pick. Reiterate Add rating. We
also see upside from an upward rebasing of investment return assumptions.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... FB7378C93B

[winston]

not vested

AIA splurges 8.7b yuan in Shanghai real estate debut

by Aiden He

Splashed out 4.61 billion yuan to acquire a 90 percent stake in a project company from units of Shanghai Industrial (0363), a Hong Kong based company mostly owned by the Shanghai government.

The project firm owns a plot on the north bund in Hongkou district for office and commercial use, which occupies an area of approximately 23,037 square meters and has a total gross floor area of approximately 230,568 sq m.

Source: The Standard

https://www.thestandard.com.hk/section- ... tate-debut

[winston]

not vested

AIA GROUP LTD (1299 HK)

Recommendation : BUY
Fair Value : HKD 110.00

RE-OPENING BENEFICIARY.

Double-digit percentage total returns in 2022, underscoring our positive stance and calls to add positions on weakness in 2022.

3Q22 business highlights reflected continued recovery underway across all its reportable segments.

Positioned to benefit from an improving outlook for new business value growth and eventual recovery in the Mainland Chinese Visitor (MCV) business.

AIA is the largest independent listed pan-Asian insurance provider with presence in 18 markets and offering a diversified products range including life, accident, health insurance and retirement savings plans.

We view AIA as a longer-term beneficiary of the rise in Asia’s middle class and affluent which will have growing protection and wealth accumulation needs.

Prudent management, strong execution and well-trained agents drive sustainable new business growth and margin expansion from higher margin products.

Although impact from the pandemic remains a risk to monitor in the near-term, we see a sequentially improving outlook over the medium-term supported by further normalisation of its business as mass vaccination takes place regionally and its China expansion plan continues to progress.

AIA has announced a USD10b share buyback plan in 2022 which spans the next three years and adds to its progressive dividend policy.

Source: OCBC