AIA Group 1299

Re: AIA Group 1299

Postby winston » Tue Dec 13, 2016 9:22 am

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Insurer relaunches popular products after hurdle

by Esther Yu

AIA (1299) is to put out a new version of its flagship saving policy "Bonus Power Plan (Enhanced Protection)" and "Proactive Insurance Plan" next week.

The insurer has issued an eternal notice earlier this month that the two products are to take an exit from the market and stopped to be sold as a result of a tightened compliance policy by the insurer regulator Office of the Commissioner of Insurance.

The new version of the two policies will be launched on the 19th this month, marketing and business strategy general manager Bonnie Tse Pui-lan revealed, the guaranteed return as well as life protection is to be raised, while reducing the non guaranteed return.

The extent of the shift is yet to be disclosed, she said.

Tse said the decision is based on the uncertainties in global financial markets, but refused that it has anything to do with the new regulation.

GN16, the regulation to be implemented in January next year, requires insurers to list all the factors affecting non guaranteed returns in the policies, including interest revenue, market risks as well as expenses. Real returns achieved are also needed to be listed on its website.

Insurers are also required to review their investment strategies every year and follow up with the policyholder on the non guaranteed returns.

That translates to a more cautious and conservative attempt when insurers spell out their bonus or non guaranteed returns in the policy terms.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 1213&sid=2
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Re: AIA Group 1299

Postby winston » Sun Dec 18, 2016 1:24 pm

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Chinese Buying Insurance in Hong Kong Said to Face Further Curbs

Mainlanders’ use of MasterCard, Visa cards said to be limited
Insurance purchases are tool for getting money out of China

Source: Bloomberg

https://www.bloomberg.com/news/articles ... ther-curbs
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Re: AIA Group 1299

Postby winston » Tue Dec 20, 2016 11:43 am

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AIA: How Bad Can China’s Capital Control Be?

By Shuli Ren

Insurer AIA Group‘s (1299.Hong Kong/AAGIY) shares have fallen by almost 20% since the beginning of November when China banned mainland Chinese visitors to Hong Kong from using their UnionPay credit cards to pay for investment-type insurance policies, part of Beijing’s tightening of capital outflow from China.

Bernstein Research‘s Linda Sun-Mattison says that paranoid investors have oversold AIA, because even if AIA loses its entire Hong Kong revenue from mainland Chinese investors, it would dent AIA’s earnings about only about 5 Hong Kong dollars. AIA’s stock, meanwhile, has fallen by about HK$10.

Sun-Mattison wrote:

Mainland Chinese visitors (MCV) contributed c.16% to AIA Group sales in 2016E.

We stress test the worst scenario of China Capital Control vs Our Base Case. It shows that, assuming all Mainland Chinse visitors disappear from Hong Kong’s life insurance market immediately, AIA Group VoNB would suffer by 10% immediately in 2017 whilst dent on OPAT would be back-ended, at c.9%.

AIA is also seen to have a lot of emerging markets exposure, since it has businesses across Asia from Thailand to Korea, so if emerging markets are falling out of favor, investors sell AIA stocks too.

According to Bernstein, this logic is flawed:
The accepted wisdom is that a quality and well owned stock like AIA will get sold off during EM fund exodus. We analysed long range data, attempting to prove this thesis. The fact is there appears to be very loose correlation between AIA share performance and EM fund flow for any period longer than three months.

Our analysis, although inconclusive, does show that the bounce back from a guess-who-would-be-selling-AIA game is always fast and strong.

Meanwhile, AIA can benefit from rising US bond yields, because about 40% of its investments are in the U.S. dollar.

Last and most importantly, AIA is starting to look cheap. In terms of price-to-book, it is now trading near the lowest level since 2014.

AIA fell another 0.3% this morning. It is now trading at 1.7 times forward book, or 15.7 times forward earnings. Bernstein sees AIA to grow sales and value of new business by 7% and 11% respectively in 2017. It has a price target of 61 Hong Kong dollars, implying another 40% upside.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... ontrol-be/
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Re: AIA Group 1299

Postby winston » Fri Jan 06, 2017 1:01 pm

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<Research Report>Macquarie Lifts AIA Target by 4% to $47; Kept Neutral

Macquarie, in its report, said that AIA (01299.HK) has underperformed Hang Seng Index by over 11 ppts following its results announcement in October.

While this may present a good buying opportunity, the research house is concerned about the uncertainty of the insurer's Hong Kong business and headwinds for FY17 VNB growth.

The rating was maintained at Neutral and the target price was increased by 4% to $47.

The broker estimated that more than 60% of AIA's revenue came from Mainland clients, representing 27% of ANP. If there is a lack of related business this year, the valuation of the company will be revised down to $44.

Hence, such factors have been reflected in the current price. Starting from 2010, the rest of AIA has lifted sales by 11% CAGR.

Source: AAStocks Financial News
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Re: AIA Group 1299

Postby winston » Fri Jan 20, 2017 11:29 am

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<Research Report>Citi Cuts AIA (01299.HK) Target to $52; More Bullish on CN Insurers

Citigroup issued a research report, adjusting the estimates on VoNB of AIA (01299.HK) to reflect its continued capital controls in mainland China and its impact on customer business in Hong Kong and mainland.

The target price was trimmed from $56 to $52 with rating Neutral.

The bank continued to recommend Chinese insurers, considering their profitability will be stronger in the foreseeable future.

Source: AAStocks Financial News
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Re: AIA Group 1299

Postby winston » Thu Feb 16, 2017 12:56 pm

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AIA Group (REDUCE, tp:HK$44.60▲) - In anticipation of a buyback

We expect a US$1.5bn share buyback to be announced at the FY16 results.

Our analysis shows a buyback at current prices only marginally impacts valuations. Investor feedback from 2.5 weeks of meetings in Europe & North America indicates expectation of capital management, with a share buyback the most likely possibility.

We may be past the winter of despair and entering into the spring of hope, but this hope is contingent on a few factors.

AIA’s share price has recently become a play on USDCNY, with the correlation co-efficient at -75% since end-Oct 2016, a sharp swing from Jan-Oct 2016’s +75%.

Our TP is increased slightly from HK$43.60 to HK$44.60. Maintain Reduce.

Source: CIMB

https://brokingrfs.cimb.com/dE7p_F6mVDc ... meuog2.pdf
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Re: AIA Group 1299

Postby winston » Fri Feb 17, 2017 1:26 pm

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Will AIA Group Raise Dividends?

By Shuli Ren

AIA’s dividend yield is indeed not handsome, at only 1.5% currently, and it is a cash cow.


Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... -dividend/
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Re: AIA Group 1299

Postby winston » Fri Feb 24, 2017 10:36 am

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AIA: Revenue Soars Despite China Crackdown, Raise Dividend

By Shuli Ren

Even though China has been cracking down on mainland Chinese going to Hong Kong to buy investment-related insurance policies, value of new business at AIA, a metric used in the insurance industry to measure future recurring cash flow, managed to grow 28% in 2016 to $2.75 billion.

In addition, AIA manages to rake in a handsome 52.8% margin on its new businesses.

Just as Morgan Stanley had predicted last week, AIA has raised its dividend by 25% to 85.65 Hong Kong cents per share, as its free cash surplus grew to a record $9.8 billion.

The 25% boost to its dividend payments would be considered a “moderate increase” by Morgan Stanley. The bank sees 2-5% increase in AIA’s shares.

AIA painted a rosy outlook for 2017, with CEO Mark Tucker commenting that “we have made an excellent start to 2017 with strong value of new business growth in the first two months of our financial year.”

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... -dividend/
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Re: AIA Group 1299

Postby winston » Fri Feb 24, 2017 3:02 pm

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AIA: To Increase Capital, Div Payout

AIA (01299.HK) declared final dividend of 63.75 cents, representing an increase of 25%.

The group's CEO and President MarkTucker said that it will continue to increase capital and dividend.

He said that the company has earmarked capital for acquisition and will take it seriously if suitable investment opportunities arise. However, the group will still focus on natural growth.

Source: AAStocks Financial News
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Re: AIA Group 1299

Postby winston » Wed Mar 08, 2017 1:57 pm

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AIA Group Has 45% Upside

By Shuli Ren

AIA’s existing insurance contracts are also nice cash cows.

As such, JPMorgan’s MW Kim expects AIA to grow its cash surplus by 36% over the next two years:

In-force value has accelerated faster than expected for the last three years, generating strong cash profit from the in-force book and capital.

As of Nov-16, the company’s undiscounted/ discounted total after-tax profits were ~US$132B/~US$32B, respectively.

We see similar degrees of meaningful excess value creation potential from its future free cash flow generation profile.

Following the higher free surplus outlook (i.e., new business strain/ NBV: ~50% in 2016 vs 144% in 2010), we forecast the company’s free surplus balance would reach US$13.6B by 2018 (~US$10B in 2016).

Due to the potential China expansion, we have maintained the company’s dividend guidance. However, strong free cash outlook creates potential upside to dividend guidance.

AIA has raised its 2016 dividend by 25% to 85.65 Hong Kong cents per share, but with $13.6 billion cash surplus by 2018, it can do more. AIA has only 35% payout ratio.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... 45-upside/
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