AIA Group 1299

[winston]

Deutsche: UnionPay Limit Only Brings Approx. 2.1% Impact on AIA's VNB

Deutsche, in its report, said according to Bloomberg, the PRC government will limit each transaction amount of UnionPay credit cards and deposit cards as from 4 February, in buying overseas insurance to be US$5,000.

The research house considered the restriction should inevitably affect the single premium business but the impact on regular premium business should be limited as customers could simply swipe the card twice for payment.

It said assuming 20% of mainland purchase would be affected by the UnionPay cap, this will translate into about 2.1% impact on AIA’s total VNB.

Deutsche reiterated the rating of AIA at Buy with target price of $56.5, considering it is the buying time if its share price falls because of the UnionPay cap.

Source: AAStocks Financial News

[winston]

AIA Group : Maintain OUTPERFORM

New report: Continued growth momentum despite equity & FX headwinds and concerns over UnionPay

● We trimmed our FY15-16E earnings by 24%-29% following mark-tomarket movements in regional equity currencies, bond markets. As such, we reduced our TP to HK$51.7 (from HK$57.5). Full report.

● We see growth pick up in some ASEAN markets in 4Q15, as well as continued strong growth in HK /China, continued momentum
of bancassurance (especially Citibank relationship, which commenced 2Q14 in HK/Singapore), and some further margin
expansion (Thailand, Malaysia and some of the Other Markets).

● SAFE implemented stricter enforcement of US$5,000 cap per transaction for purchasing insurance overseas via UnionPay card.
Impact on AIA group VNB should be manageable, in our view.

The average size of regular pay policy purchased by mainlanders is under a reasonable range (US$5k to 25k). Jumbo size policies
(>US$1 mn) account for a small portion of group VNB (3-5% perour estimates) and can still be purchased through other channels.

● Catalyst: FY15 result release on 25 Feb 2016 (pre-market). We expect 18% VNB growth (and 23% in constant currency).


Source: CS

[winston]

not vested

<Research Report>G Sachs Cuts AIA's Target to $57; Reiterated at CL-Buy List

Goldman Sachs, in its report, stated that the current macro environment, especially lower long bond yields, presents headwinds for life insurers.

Yet, the broker believed that AIA (01299.HK)'s balance sheet and fundamental growth are solid and likely to be more resilient than its competitors especially, given its focus on asset and liability quality and strong capital position.

Goldman Sachs reiterated AIA at CL-Buy and the insurer's target price was cut from $60 to $57.

The broker lowered AIA's earnings forecast for 2015-2017 by 4%-17% to reflect capital market movements. Due to the foreign exchange fluctuations, the VONB growth in 2016 is expected to be 15%.

Source: AAStocks Financial News

[winston]

not vested

<Research Report>AIA (01299.HK)'s Investment Ratings and Targets (Table)

On 25 February 2016, AIA (01299.HK) is going to release its full-year results for the period ended 30 November 2015.

Our website summarized the earnings forecast from 14 brokers and the insurer is expected to record a profit of US$2.602 billion-US$4.116 billion (from -24.5% to +19.3% YoY).

The median was US$2.979 billion, down 13.6% yearly.

Our website also summarized the investment ratings and target prices issued by 15 brokers:

Broker / Investment Rating / Target Price (HK$)
Citigroup / Buy / 60
Nomura / Buy / 60
Kim Eng / Buy / 58
BNP Paribas / Buy / 57.18
Goldman Sachs / CL-Buy / 57
Bernstein / Outperform / 57
Deutsche / Buy / 56.5
UBS / Buy / 56.5
BOCOM International / Buy / 56.47
JP Morgan / Overweight / 56
Morgan Stanley / Overweight / 55
Jefferies / Buy / 54
CICC / Buy / 52
Credit Suisse / Outperform / 51.7
HSBC / Buy / 51

Source; AAStocks Financial News

[winston]

not vested

AIA: Strong New Business Growth, Dividend Boost

By Shuli Ren

In 2015, new business value at AIA, a measure of future profitability of new policies, jumped 19% to $2.2 billion, beating the 17.4% increase expected by the street.

AIA’s full year profit fell 22% to $2.7 billion, because of volatility in stock and currency markets

AIA booked a net equity gain of $508 million in 2014 but a net loss of $370 million in 2015.

Currencies in five of its six largest markets depreciated by as much as 21% during the year

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... end-boost/

[winston]

not vested

<Research Report>Citi Downgrades AIA(01299.HK) to Neutral with Target Cut to $47

Citigroup, in its report, said AIA(01299.HK)'s share price has been rising nearly 1.2 times since its listing, significantly outperforming Hang Seng Index and financial stocks of Hong Kong and mainland China.

It considered AIA was a well-owned stock with well-known strengths. It believed the share price to be capped in foreseeable future, mainly due to mainland's tighter capital controls affecting HK business.

Both Asian regional economies and markets face challenges; new business value slows down. The research house downgraded AIA (01299.HK) to Neutral from Buy with target cut to $47 from $60.

There were reports saying the People's Bank of China will forbid mainland residents to use electronic payment services, such as UnionPay cards, and buy life insurance and investment-related products to curb further outflows of RMB.

For this, Citigroup considered the direct impact on AIA's HK business is relatively low as its business focuses protection products instead of large investment products. However, AIA's valuation's rising momentum would be hindered by mainland's stricter capital controls.

Citigroup lowered forecasts on AIA's NBV, EV and earnings. Of which, its NBV has already been keeping 20%-above growth for five years based on fixed exchange rates.

It forecast AIA's NBV growth for 2016 to ease to 16%, falling short of the growth of 24% and 19% for 2014 and 2015 respectively, considering currency devaluation of ASEAN and potential slowdown of HK business.

Source: AAStocks Financial News

[winston]

not vested

AIA: China Tightens Capital Control, Citi Downgrades

By Shuli Ren

We believe AIA’s share price will be capped in the foreseeable future (especially after the recent rebound) given tightening capital controls in China (impact on HK biz), ongoing Asian macro/market headwinds and likely VoNB growth deceleration.

The base for comparison is high after 5 consecutive years of 20%+ VoNB growth (constant currency basis).

And given ongoing ASEAN currency depreciation and likely some slowdown in HK biz, we expect VoNB growth to decelerate to 16% in 2016E (from 24%/19% in 2014/15).

A well-owned stock, AIA is not cheap, trading at 2.3 times book, or 3 times EV/Sales.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... owngrades/

[winston]

vested ( Put Warrant )

Insurer shares hit by mainland restrictions

AIA Group (1299) shares fell after China tightened restrictions on the use of third-party payment providers to buy insurance products in the SAR.

The stocked dropped as much as 2.4 percent yesterday, but later recovered to end 0.8 percent lower at HK$42.65.

Bloomberg reported on Saturday that the People's Bank of China will ban the use of electronic payment services by mainland residents to purchase insurance and investment- related products, starting March 12.

Individuals can still use the services to buy insurance policies against personal accidents and for medical and transportation coverage, with a transaction and policy cap of 30,000 yuan (HK$35,800).

BOC Group Life Assurance said the insurer was suspending any payments made by China UnionPay cards through online payment provider All In Pay Network Services.

Purchases of insurance policies by mainland visitors in Hong Kong reached HK$21.1 billion last year through September.

Source: BLOOMBERG

[winston]

vested (Put Warrant)

The Credit Card Loophole That Gets Around China's Capital Curbs

by Alfred Liu

China broker offers clients 1st class to Hong Kong plus hotel

Multiple swipes popular amid limits placed on UnionPay cards

More than 800. That’s how many times Hong Kong insurance agent Raymond Ng swiped the credit cards of a mainland Chinese client buying HK$28 million ($3.6 million) worth of insurance policies in the city earlier this month.

Source: Bloomberg

http://www.bloomberg.com/news/articles/ ... flow-curbs

[winston]

not vested

<Research Report>UBS Expects AIA 1Q VoNB Growth to Maintain at Over 24%

AIA (01299.HK) is scheduled to release its first quarter results next Friday (22 April).

UBS expected growth momentum in Hong Kong and China to likely remain a key growth driver for the company. The market in Hong Kong and China had reached 49% of total VoNB and 43% of total ANP.

Based on the information of CIRC, AIA's China's premiums recorded a growth of 31.7% in 1Q, compared with 20.9% growth of same period last year.

The research house expects the Hong Kong market to sustain relatively strong growth, driven by high-quality protection and long-term savings products.

UBS sees limited impact from China's tightening purchases of overseas insurance products using UnionPay cards on AIA (Hong Kong). It is reiterated that the growth for AIA (Hong Kong) is demand-driven (mainly high margin medical insurance products) and will not be materially affected by the slowdown in China capital flow.

The broker said that since end 2015, AIA's major Asian markets have appreciated against USD by an average of roughly 3% and the equity markets have seen a recovery as well.

Hence, it is believed that 2016-2018 VoNB growth can reach 24.3%/ 20%/ 17.2% respectively.

In the first quarter, VoNB growth is expected to exceed the full year forecast of 24% growth in 2016. The rating was maintained at Buy, with a target price of $58.27.

Source: AAStocks Financial News