AIA Group 1299

[winston]

vested

AIA Group (1299 HK): Expect strong pent-up demand in FY23F [BUY, TP HK$124.00]

Revise down FY22/23F VONB by 11%/9% to reflect:-
1) impact from China’s 2Q lockdown measures and
2) as HK/China border reopening more likely in FY23F

Strong pent-up demand expected from HK market once HK-China border reopens

Concerns overdone on recent sharp US interest rate hike and MTM impact to bond portfolio, given low EV sensitivity to interest rates

Revise down FY22/23F earnings by 6%/2% to reflect slower investment income growth. Roll over valuation base to FY23F and lower TP to HK$124 on lower multiple

Source: DBS

[winston]

vested

1H22F preview: ASEAN rebound is key

We forecast 1H22F VONB to fall 17% yoy (1Q22: -18.9%; 2Q22F: -14%), with 1H22F currency headwinds yoy of 2%-pt (1Q22: 1%-pt; 2Q22F: 4%-pts).

We expect HK, Singapore and Malaysia to be the three strongest regions with mainland China the weakest.

Of interest to investors may be how quickly growth in ASEAN VONB is recovering, as it learns to “live with the virus”.

Reiterate Add rating. No change to TP of HK$96.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 634D239E6B

[winston]

vested

AIA Group – BUY

Recovery in the insurance sector will be supported by China’s reopening and economic
recovery in ASEAN countries.

Furthermore, China recently reduced the quarantine period for international travelers to 7+3 days (from 14-21 days previously), indicating a
significant step toward relaxing COVID-19 restrictions in place for over two years.

We see this as an early indication of the potential reopening of the Hong Kong-China border, which will primarily benefit regional insurers like AIA whose Hong Kong operations were previously primarily driven by mainland Chinese visitors.

As a result, we believe AIA's:
a) diversified business portfolio in different countries,
b) potential growth from China's geographical expansion,
c) position as a direct beneficiary of the potential reopening of the Hong Kong-China borders,
d) alignment of its high quality agency strategy with the middle-class customers that AIA is targeting,
e) minimal China property bond exposure (AIA’s overall exposure to the China real estate market through bonds and shares at 1% of the US$250b in 2021) give it a competitive edge as compared with industry peers.

ASEAN saw strong sales improvement as the number of COVID-19 cases has largely declined. In our recent engagement with company representatives, we understand that sales in ASEAN countries have been progressively picking up, and should further deliver meaningful growth momentum from 2H22 onwards.

Share Price Catalyst
• Event: potential growth from China’s geographical expansion and economic recovery in ASEAN countries.
• Timeline: 2H22.

Source: UOBKH

[winston]

vested

AIA 1H Results Swing into Loss of USD571M; Interim DPS Grows to HK40.28 Cents

AIA (01299.HK) announced the financial results for the interim period of 2022.

A loss of USD571 million was recorded over the period, compared to the net profit of USD3.245 billion in the corresponding period of the previous year.

EPS was US5 cents.

An interim dividend of HK40.28 cents per share was declared, against a dividend of HK38 cents per share in the corresponding period of the previous year.

Dividend History
Announce Date Event Particular
2022/03/11 Final D:HKD 1.0800
2021/08/17 Interim D:HKD 0.3800
2021/03/12 Final D:HKD 1.0030
2020/08/20 Interim D:HKD 0.3500

Source: AAStocks Financial News

[winston]

vested

Brokers│Views

Morgan Stanley|1H VNB sinks 13% on Covid but resumes overall growth in Jun, positive rise in Jul

Citigroup│2Q VNB, interim DPS hike in line

JPMorgan│interim DPS, solvency capital better than forecast

Goldman Sachs|1H VNB in line, most markets to resume positive VNB growth in 2H

Related News: JPM: AIA Interim Div., Solvency Capital Beat, Rating Restated Overweight

Source: AAStocks Financial News

[winston]

vested

Hong Kong-based AIA foresees recovery in mainland China despite 15 per cent slump in new business value

The insurer is positive about future growth in the mainland market, says its regional chief executive

The company reported a 15 per cent drop in first-half new business value, a measure of the future profitability of new policies

by Iris Ouyang

AIA’s new business value (NBV) declined 24 per cent in China to US$563 million in the first six months of 2022.

That dragged down AIA’s overall NBV, which slumped 15 per cent to US$1.5 billion.

3% NBV growth in Hong Kong and Malaysia, with the other regions recording drops.

Source: SCMP

https://www.scmp.com/business/banking-f ... e=homepage

[winston]

vested

Insurer AIA sees sales rebound despite lower new business value on Covid-19 woes

by Savyata Mishra & Selena Li

China and Hong Kong account for about 58% of new business growth globally at AIA.

Source: Reuters

https://www.theedgemarkets.com/article/ ... vid19-woes

[winston]

vested

AIA Group (1299 HK)
1H22: Value Of New Business Below Expectations

AIA’s 1H22 earnings came in below our expectations as sales were curtailed by the
Omicron waves in 1Q22.

However, group VONB returned to positive growth in Jun 22 across most markets, and Mainland China also reported positive VONB growth in July, which bodes well for 2H22 growth momentum.

We trim our 2022-23 earnings forecasts to factor in the lacklustre 1H22 earnings and expect 2H22 to see a better recovery.

Maintain BUY with a lower target price of HK$97.95.

Source: UOBKH

https://research.uobkayhian.com/content ... 37a5cb73ea

[winston]

not vested

AIA Group Ltd (1299 HK) - Encouraging signs of recovery

IA 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. BUY.

Source: OCBC

[winston]

not vested

Reopening: Macau greater near-term impact

Macau’s further re-opening to mainland China’s coastal regions has more of a near-term impact than HK’s reopening to the rest of the world, in our view.

This stems from more mainland Chinese visitors (MCV) buying insurance in Macau. This segment rose yoy by 25% in 1H22 (1Q22: 104%) [Fig 3].

MCV insurance demand had traditionally been strongly correlated to Rmb weakness (Fig 1). We see this continuing, thus spurring MCV sales growth.

We believe half of MCV pre-2020 came from China’s coastal regions, with 15% coming from Guangdong. Add rating and TP of HK$96 unchanged.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... BE91C6692B