AIA Group 1299

[winston]

Views mixed on AIA float by Mandy Lo
Friday, October 15, 2010

American International Assurance opens its retail book on Monday to tap the market for up to HK$115.26 billion.

But analysts are divided over the valuation and investment outlook of the Asian insurance arm of American International Group.

"We'd advise sticking to the lower end of the pricing range, and we certainly wouldn't recommend an `overweight,"' CLSA analyst Patricia Cheng said. AIA plans to sell 5.86 billion shares at HK$18.38 to HK$19.68 each to repay US government debt.

The insurer, which operates in 15 Asia Pacific markets, said premium income in six months to May 31 stood at US$6.02 billion (HK$46.96 billion), up 13 percent from a year earlier.

But profit from embedded value is expected to tumble 27 percent after 2015, according to the IPO prospectus. "Without growth, earnings won't be sustainable - and that defeats the purpose of buying what's likely to be sold as an `Asian story,"' Cheng said.

But Stephen Andrews and Kenneth Lo from UBS, one of the joint bookrunners, are bullish about AIA's position in Asia. They said it may also benefit from the appreciation of Asian currencies.

UBS sees Asian currencies strengthening by 2-5 percent against the US dollar over the next 12 months. It puts AIA's valuation range at between HK$242 billion and HK$299 billion.

The insurer's net profit rose 9.42 percent to US$1.06 billion in the six months to May.

Sources earlier said AIA's institutional tranche was five times oversubscribed, backed by seven corporate investors including billionaires Cheng Yu-tung and Warren Buffett plus the Kuwait Investment Authority.

AIA is set to make its Hong Kong trading debut on October 29.


http://www.thestandard.com.hk/news_deta ... 01015&fc=8

[winston]

Not vested

MARKET TALK: AIA Dn 1.4%; HSBC Initiates With HK$20 Target


Source: Dow Jones Newswire

[winston]

Not vested. From Nomura:-

TP revised up 4.3% to HKD24; rolling over to FY11F valuation

We have revised our TP to HKD24 after rolling over our valuation to FY11F.

Our TP implies a target PEV of 1.3x and NB Multiple of 15x. AIA is trading at 1.2x FY11F PEV and 13x FY11E NB Multiple.

With no clear guidance on any potential quarterly disclosures, we think this set of results is unlikely to trigger a significant rally based on fundamentals.

Buyers that prefer AIA over Chinese insurers for value and more diversified growth mix have been given more confidence but the sceptics remain in our view.

[winston]

Not vested

UPDATE 1-AIA says Q1 value of new business up 21 pct y/yTweet Share

* Value of new business (VONB) rises to $182 mln in Q1
* VONB margin up 130 basis points at 35.2 percent
* Annualised new premium sales climb 17 pct to $512 mln (Adds details, quotes)

HONG KONG, April 18 (Reuters) - AIA Group Ltd , Asia's No.3 insurer, posted a 21 percent rise in its value of new business to $182 million in the first quarter compared to a year earlier on a favourable product mix, it said on Monday.

Its group margin for the value of new business in the first quarter ending February was up 130 bps from a year ago to 35.2 percent, while annualised new premium sales were up 17 percent to $512 million during the same period.

"Product mix changes and repricing actions were the main drivers of the increased margin," AIA said in a statement. "We are eliminating lower margin products, concentrating on regular premium business and reducing back-end loaded product structures."

AIA said Hong Kong, Thailand and China had benefited from the strategies, while business in Singapore was boosted by a switch to higher margin investment-linked products.

However, the insurer, which listed last October in the world's third biggest IPO, said it was still trying to reposition its operations in Korea, where its business saw a decline.

Its shares gained 2 percent in early Monday trade.

http://www.reuters.com/article/2011/04/ ... 2020110418

[winston]

Not vested

DJ MARKET TALK: CS Keeps AIA Group At Neutral, HK$25 Target

1402 [Dow Jones] STOCK CALL: Credit Suisse remains positive to AIA Group's (1299.HK) outlook despite its shares trading at the top end of a range vs peers' after a surge in its share price in recent months.

AIA is at HK$26.00, down 1.9% from Friday, but has been up 18% since its 2010 results announcement late February.

Credit Suisse notes the stock is trading on 20X 2011 estimated P/E, but EPS growth forecast is at 12%-13%. But the house reckons, in the medium term, AIA will see recovery of new business volumes, increased margins from better product mix, potential for acquisitions amid excess capital and limited debt, and a strong share rating.

Credit Suisse maintains a Neutral rating and HK$25.00 price target for the next 12 months.

Source: Dow Jones Newswire

[millionairemind]

Just met with my insurance agent to do our yearly review..

He told me he just quit AIA and will be joining a competitor ..

Reason being he said that after AIA got listed, his customers claims are often either rejected... or takes a few months to process...

I probably need to spread my insurance needs with a couple more companies... other than AIA...just to be safe

[winston]

AIA’s Value of New Business Rises 53% in Third Quarter on China, Malaysia By Bei Hu

AIA Group Ltd. (1299), the third-largest Asia-based insurer by market capitalization, said its value of new business expanded 53 percent in the third quarter, led by higher sales in Malaysia and China.

The gauge of projected future profitability of new policies rose to $245 million, from $160 million a year earlier, the Hong Kong-based insurer said in a statement to the Hong Kong stock exchange today.

The consensus estimate by analysts was for a 30 percent increase, according to a Goldman Sachs Group Inc. report dated Oct. 10.

http://www.bloomberg.com/news/2011-10-1 ... aysia.html

[winston]

not vested

DJ MARKET TALK: AIA Down 1.2%; AIG Sell-Down Concerns Weigh

1429 [Dow Jones] Concerns about a possible stake sell-down by American International Group (AIG) may cap AIA's (1299.HK) short-term performance, despite the insurer's strong 3Q business update.

AIG, which is selling assets to repay the U.S. Treasury following its bailout in the 2008 financial crisis, can sell half of its 32.89% stake in AIA Group on Oct. 29, a year after it spun off the firm in a Hong Kong listing. It can sell the remaining stake in April 2012.

"It's very likely AIG will reduce its stake to repay the government debt, especially as AIA's share price is way above its IPO price of HK$19.68," says JPMorgan analyst Baoling Chan, adding investors will likely remain cautious about the stock until the overhang is removed.

Source: Dow Jones Newswire

[winston]

not vested


DJ MARKET TALK: AIA's S/T Weakness May Be L/T Investors' Chance

1325 [Dow Jones] AIA's (1299.HK) two-session underperformance, after a stellar 3Q business update (out Friday morning before market opened), is likely chiefly weighed by concerns about a possible stake sell-down by American International Group (AIG).

AIA is down 1.5% at HK$23.55 at interval, adding to its 2.0% fall Friday; the stock is the most heavily shorted Hong Kong stock at midday with HK$198.06 million, itself accounting for 9.4% of total short-selling volume.

If such a reading is correct, more short-term weakness may potentially be a chance for long-term investors to accumulate AIA shares. AIG, which is selling assets to repay the U.S. Treasury following its bailout in the 2008 financial crisis, can sell half of its 32.89% stake in AIA Group on Oct. 29, a year after it spun off the firm in a Hong Kong listing; it can sell the remaining stake in April 2012.

Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: AIA Volume Growth Strong, Margin Enhanced -Daiwa

1452 [Dow Jones] STOCK CALL: Daiwa trims AIA's (1299.HK) target price to HK$33.71 from HK$35.08 on a lower target P/EV multiple to reflect lower terminal growth, but keeps the stock at Buy.

"We maintain our positive view on AIA as the company reports stellar 3Q FY11 results with Value of New Business growth at 53.0% year-on-year demonstrating strong volume growth as well as margin enhancement."

Daiwa adds, in contrast to many, it still sees AIA as a growing Asian insurance story; even for markets most believe to be developed, "we see growth for AIA coming from margin improvement."

Trading at 1.3X FY11 P/EV, "we see its valuation as attractive." The stock is down 2.5% at HK$23.30.


Source: Dow Jones Newswire