AIA Group 1299 02 (Jun 20 - Dec 27)

[winston]

vested

AIA Group Ltd (1299 HK) - Slower 3Q

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).

2020 value of new business (VONB) breakdown:
1. Mainland China 32% (vs 2019’s 26%)
2. Hong Kong 18% (vs 2019’s 37%)
3. Thailand 15% (vs 2019’s 11%)
4. Singapore 11% (vs 2019’s 8%)
5. Malaysia 7% (vs 2019’s 6%)
6. Others 17% (vs 2019’s 12%)

We view AIA as a beneficiary of the rise of Asia’s middle class (particularly China) with 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 near term, we see a sequentially improving outlook ahead supported by further normalization of its business as mass vaccination materializes regionally and its China expansion plan continues to progress. BUY.

Source: OCBC

[winston]

vested

Omicron resilience

AIA’s share price has outperformed strongly in the past week despite HK’s fifth wave of Covid-19, suggesting such concerns may have been priced in.

Another reason for the outperformance is AIA benefits from higher interest rates, with bond yields rising markedly across almost all of its major markets.

We see high probability of an announcement near term that AIA China is entering into another new region, with this positive to its share price.

Reiterate Add. AIA remains our sector top pick. Our TP dips to HK$107 on reduced FY21F-FY23F VONB and EPS due to HK’s Covid-19 outbreak.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... A2490F4EA6

[winston]

not vested

AIA 2021 VONB on CER Up 18%, Beating Forecast; US$10B Shr Buyback Planned in Next 3 Yrs

AIA (01299.HK) announced the annual results for the year ended 31 December 2021.

The group's value of new business (VONB) expanded by 22% YoY on an actual exchange rate (AER) basis and 18% on a constant exchange rate (CER) basis, to US$3.366 billion, ahead of the VONB of US$3.158-3.357 billion previously forecast by 14 brokers.

Basic EV operating earnings per share was US65.44 cents, up 7% YoY on an AER basis.

Dividend History
Announce Date Event Particular
2021/08/17 Interim D:HKD 0.3800
2021/03/12 Final D:HKD 1.0030
2020/08/20 Interim D:HKD 0.3500
2020/03/12 Final D:HKD 0.9330

A final dividend of HK$1.08 per share was declared. The full-year DPS was HK$1.46, a YoY growth of 8%.

Related News: Citi Lowers AIA (01299.HK) TP to $110, Rated Buy

Additionally, Lee Yuan Siong, Chief Executive and President of AIA, expressed that, with clarity on the Group’s regulatory capital requirements and its very strong free surplus position, the Board has approved a return of capital to shareholders of up to US$10 billion to be conducted through a share buyback programme over the next three years.

Source: AAStocks Financial News

[winston]

AIA Group (1299 HK)
2021: Value Of New Business In Line

AIA delivered solid 2021 results, with value of new business increasing 19% yoy.

Looking ahead, AIA China’s geographic expansion and premier agency, will be the key
growth drivers and GBA offers huge potential.

The Board also declared a second interim dividend and a share buy-back programme of US$10.0b.

Maintain BUY but with target price reduced to HK$105.30 given the weaker economy in China and the delay in border reopening with Hong Kong.

Source: UOBKH

https://research.uobkayhian.com/content ... 7a929baee5

[winston]

vested

AIA Group Ltd (1299 HK) - First share buyback program announced since IPO

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 beneficiary of the rise of Asia’s middle class (particularly China) and affluent with 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 near term, we see a sequentially improving outlook over the medium term supported by further normalization of its business as mass vaccination takes place regionally and its China expansion plan continues to progress. BUY.

Source: OCBC

[winston]

not vested

Brokers│Views

Daiwa│2021 VONB beat forecast; USD10 billion share buyback attested healthy and sufficient capital condition

DBS│2021 results solid; share buyback program could potentially enhance values for shareholders

Morgan Stanley│USD10 billion share buyback surprising; confident in outlook

Huatai Financial Holdings│2021 earnings, VONB ahead of forecasts; integrated business projected to track healthy rebound from 2Q

Citigroup│2021 VONB beat forecast; profit from Hong Kong operation logged robust growth

BofA Securities│2021 VONB in line; robust profit growth from Hong Kong operation

CICC│Share buyback program strengthened confidence; optimistic on long-term investment value

Goldman Sachs│Solid VONB performance led to increased return for shareholders
Jefferies│2021 results beat forecast; share buyback program surprising

Credit Suisse│2021 VONB performance robust; USD10 billion share buyback program surprising

JPMorgan│TP lifted on promising growth momentum for Thailand and Hong Kong operations

UBS│4Q21 VONB slightly beat forecast; share buyback program surprising

HSBC Global Research│Enticing valuation provided good entry point

Nomura│2021 VONB ahead of forecast

Macquarie│2021 VONB ahead of forecast; outlook unclear due to downside risks in China

Source: AAStocks Financial News

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Ending an 11-year wait

An 11-year wait has ended, with a share buyback of up to US$10bn, the first since its 2010 IPO. FY21 free surplus was US$25bn after adoption of RBC.

VONB was impressive, with FY21 up 22% yoy and 4Q21 up 26% yoy, driven primarily by HK and, to a lesser extent, Thailand.

1H22F remains a key challenge, due to a high base in China in 1Q22F and given Omicron-related uncertainty in HK in 1H22F.

Reiterate Add rating. AIA remains our top pick in the sector. Our lower TP of
HK$101 is due to lower FY22F-24F VONB estimates.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 220484DE87

[winston]

Decoding HK: Margin-driven growth

AIA HK’s 2H21 record high VONB growth of 82% yoy has attracted significant investor queries on sustainability, with 2H21 margins also at a record high.

A key driver of HK’s 2H21 VONB margins was higher US rates. We see this continuing in FY22F given the sharp rise in US 10-year bond yields (Fig 6).

A key concern is falling HK agent numbers yoy (-5% for AIA in 2021). Industry data show conditions in Mar 2022 (-9%) were the worst in 16 years (Fig 24).

Reiterate Add rating. Trim TP to HK$100 on lower FY22F-24F VONB.

Source: UOBKH

https://rfs.cgs-cimb.com/api/download?f ... 4465807A4B

[winston]

1Q22F preview: Can margins save the day?

We view 1Q22F to be the toughest quarter for value of new business (VONB) yoy at -18%, versus 2Q22F’s -12.4%, 3Q22F’s +9.2% and 4Q22F’s +11.2%.

While we see weak HK annualised new premium (ANP) volumes, we see a strong HK margin performance helping cushion the impact of Covid-19.

We see China as the worst performing market for VONB growth, due to falling margins, a high base and Covid-19 outbreaks.

Reiterate Add; TP cut to HK$94 as we mark-to-market for weak equity markets, with cuts to our FY22F-24F EPS, EV & VONB.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 19D17CB64A

[winston]

not vested

Moving past the worst quarter

In-line 1Q22 VONB. HK strength was more than offset by China weakness.

China’s product mix had shifted noticeably towards savings during the Covid19 pandemic in 2021 (Fig 5), and this shift continued in 1Q22 yoy.

We see a more positive VONB outlook in 2Q22F, especially in ASEAN where
Covid-19 infections have clearly peaked.

Remain top sector pick. Reiterate Add. Unchanged TP of HK$94

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 64336BCE86