AIA Group 1299 02 (Jun 20 - Dec 27)

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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

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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

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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

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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

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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

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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

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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

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DBS Chops 2022E AIA VONB to -5% YoY, Rating Kept Buy

AIA (01299.HK) is sufficiently prepared for further business expansion as the company targets to grow its VONB by 5x by 2031, reported DBS.

Factoring in the 1H22 results, the broker reduced the 2022-23E VONB growth for AIA to -5% and +16%, respectively.

The stock was restated at Buy, with its target price lowered to $118.

Related News - C Suisse: HK Eases Quarantine Rules for Inbound Persons; CATHAY PAC AIR, AIA, PRU Favored

DBS highlighted that the market has yet to factor in the additional value from the China Post Life investment, which is expected to fetch an additional income of $4 per share for AIA.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... t-news/HK6

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Lessons from the past

We think AIA’s P/EV falling to >2 s.d. below its post-2017 mean suggests investors no longer expect strong future growth for its mainland China unit.

But strong mainland Chinese insurance demand can be tapped indirectly via Macau. We also remain confident of China’s long-term growth potential.

We also analyse past periods of AIA’s P/EV trough multiples post IPO. We conclude AIA has been oversold & advise buying on current price weakness.

Reiterate Add rating but lower TP to HK$88 on broadly lower FY22F-24F EPS & VONB due to adverse investment markets & currency movements.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 15E3D4524E

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AIA(1299)

Analysis：

AIA is the largest Pan-Asia independently listed life insurance group that covered 18 market in the world.

For the six months ended 30 June 2022, Value of New Business (VONB) of the group amounted to USD 1.536 billion, representing a decrease of 13% YoY.

Operating profit after tax amounted to USD 3.223 billion, representing an increase of 4%.

Net loss affected by negative investment return, amounted USD 0.571 billion loss.

Lee Yuan Siong, AIA`s Group Chief Executive and President claimed that sales momentum improved in the second quarter, and the Value of New Business (VONB) amounted a growth in June.

In addition, Hong Kong implemented 0+3 q uarantine arrangements for inbound persons from overseas places and Taiwan, it enhances business activities.

We expected that the society will return to normal slowly by lifting epidemic prevention policy, then the Value of New Business (VONB) growth will be rebound.

Strategy：
Buy-in Price: $69.00, Target Price: $75.20, Cut Loss Price: $65.50

Source: Phillips