AIA Group 1299 02 (Jun 20 - Dec 27)

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G Sachs: AIA (01299.HK) Says CN Biz Focus is Distribution Agencies; Buy Kept on AIA

Goldman Sachs issued a report on an earlier meeting between representatives from AIA (01299.HK) and investors.

Investors placed their focus on AIA's Mainland business and updates on the MCV (mainland Chinese visitor) business in Hong Kong, in particular the outlook for the Mainland-related product portfolio and margin performance.

The company meanwhile emphasised its focus on its distribution agencies and its collaboration with its bank partners, which have access to a larger number of high-end customers.

The broker recognised that AIA's further expansion of its bancassurance business may put pressure on margins. However, some banks have large customer bases, such as PSBC (01658.HK) , which has between 30 million and 40 million high-end customers, giving AIA's products plenty of room for growth.

Its tax-deductible retirement products are targeted at the affluent, and although the products' margins are relatively low, 35% of sales come from new customers.

In the past, sales of protection products were more likely to come from new sales agents. With the company's plan to recruit more and expand its network, it is expected that the trend of the past 3 years, when sales of additional protection grew more than new business as a result of Covid, will be reversed.

Goldman maintained a Buy rating on AIA, with a target price of $101.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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VONB: Higher for longer

We see upward revisions to FY23F & FY24F Bloomberg consensus VONB growth (Fig 2-3), with HK strength persisting on sustained MCV momentum.

We do not think IFRS17 adoption will change AIA’s share price drivers away from VONB growth, based on the mix of investor queries about AIA.

AIA’s book value sensitivity to higher interest rates has more than halved in 1H23 compared to 1H22 (Fig 14).

We expect 39% yoy VONB growth in 3Q23F and think it could be a re-rating catalyst.

Reiterate Add rating, TP unchanged at HK$91.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 91375FEF90

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AIA 3Q VONB Grows 35% on CER Basis

AIA (01299.HK) announced that, for the third quarter ended 30 September 2023, the value of new business (VONB) of the group increased by 35% YoY on the constant exchange rate (CER) basis and by 34% on the actual exchange rate (AER) basis, respectively, to US$994 million.

Nomura and Goldman Sachs previously forecast the VONB of the group in the third quarter to be US$914 million and US$949 million, respectively.

Related News: UBS Lowers AIA (01299.HK) TP to $95, Rating Buy

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

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vested

AIA Group (1299 HK)
Maintain High VONB Growth In 3Q23; Outperforms Peers

AIA’s 3Q23 VONB came in above our estimates with 34.1% yoy growth, driven by the
encouraging sales to MCV in Hong Kong and reaccelerated VONB growth in China.

The ASEAN and India markets also delivered strong double-digit VONB growth.

Margins improved for the first time since 4Q22 by 1.8ppt qoq to 51.3% due to a favourable shift
in product mix and improved margins of the bancassurance channel in China.

Maintain BUY with an unchanged target price of HK$95.00.

Source: UOBKH

https://research.uobkayhian.com/content ... 0a78e1eafa

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Citi: AIA (01299.HK) 3Q VoNB Moderately Beats

Citi Research wrote in a report that the Value of New Business (VoNB) of AIA (01299.HK) during 3Q was slightly ahead of expectations, rising 35% YoY to US$994 million at constant exchange rates (CER), and 5% above market expectations.

This was driven by a 54% YoY increase in annualised new premiums in the quarter, which also meant that 3Q profit margins improved by 1.7 ppts QoQ.

VoNB for the first nine months hiked 36% YoY to US$3.023 billion, higher than the same period last year.

The broker noted that VoNB of Mainland business rose by more than 20% YoY in 3Q, accelerating from 14% in 1H, with double-digit growth in critical illness products.

Hong Kong business recorded strong growth in VoNB, benefiting from strong inbound business from Mainland Chinese Visitors (MCVs), even as the local business declined slightly YoY.

Related News - Nomura: AIA (01299.HK) 3Q VONB Beats

Citi gave a target price of $105 to AIA and maintained its Buy rating.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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Brokers│Views

Daiwa│VONB growth driven by mainland China and ASEAN region businesses

Citigroup│VONB slightly beat

HSBC Global Research│VONB resilient with improved VONB margin

Huatai Securities│Quarterly VONB growth robust

BofA Securities│Positive momentum sustained over 3Q

Goldman Sachs│VONB ahead of forecast

Nomura│Quarterly VONB beat on expansion in annualized net revenue, despite decline in VONB margin

UBS│3Q results beat; VONB margin improved QoQ

CLSA│Business momentum strong

CICC│VONB once again beat; focus on flow to foreign capital to identify buying opportunities

Jefferies│Historically strongest 3Q

Guotai Junan Securities│Quarterly VONB hit new high with faster growth across all major regions

JPMorgan│VONB growth strong

GF Securities│Full-fledged business revival with strong VONB growth momentum

Source: AAstocks.com

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

Related NewsNomura: AIA (01299.HK) 3Q VONB Beats


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China expansion intact
3Q23 VONB up 35% y-o-y, beating expectations

Double-digit VONB y-o-y growth seen in HK, China, ASEAN, India

China growth likely to reaccelerate with double-digit growth in active agent headcount, stable product mix

Factoring in stronger-than-expected VONB growth, weaker investment sentiment, and rolling over to FY24F, maintain BUY with unchanged TP of HK$118

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=17049

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Benefitting from 4Q underestimation bias

There is a clear bias towards AIA outperforming in 4Q vs. other quarters since its 2010 IPO (Fig 1-2). We expect this to repeat in 4Q23F.

We see AIA benefitting from consensus upgrades to 4Q23F, FY24F & FY25F VONB growth, which we see as too low at 20%, 17% and 16% yoy (Fig 4).

3Q23 results had addressed the main four areas of concern to investors in our view, three of which related to its mainland China business.

Reiterate Add rating, TP unchanged at HK$91. Remains our sector top pick.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 18F7BE9CC3

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CLSA Reduces AIA (01299.HK) TP to $80, Expects Impressive VONB Growth in 2023/24

CLSA wrote in a report that it has updated its estimates for AIA (01299.HK), expecting the insurer's value of new business (VONB) to perform favourably, with YoY increases of 30% and 14% in 2023 and 2024 respectively.

The broker believed AIA would launch a new buyback programme totalling US$4 billion over the next three years.

In light of the deteriorating sentiment, CLSA lowered its target price for AIA from $94 to $80, but reiterated its Buy rating, reflecting the impressive VONB growth, attractive valuation and recovery in return on embedded value (ROEV).

Related News: Nomura Cuts AIA (01299.HK) TP to $92.68, Expects 2023 VoNB to Hike 30%

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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JPM Elevates AIA (01299.HK) TP to $92, Rating Overweight

JPMorgan commented in a report that AIA (01299.HK) offered attractive risk-adjusted returns on a well-capitalised base across growth, value and income-producing businesses.

The broker has made a small average upward revision of 0.3% to its value of new business (VONB) forecasts for 2023 to 2025, reflecting stronger-than-expected growth trends in both local and Mainland businesses.

JPM raises its target price for AIA from $87 to $92 and rates the company Overweight.

Related News: Nomura Cuts AIA (01299.HK) TP to $92.68, Expects 2023 VoNB to Hike 30%

The broker forecasted that AIA's embedded value will grow by 12% in FY24 and 13% in FY25, driving compounded enterprise value growth.

It also expected AIA's total free capital balance to reach US$16.7 billion by December 2024, taking into account buybacks and dividends.

With growth in self-funding and a strong capital base, there is scope for greater improvement in total shareholder return, the broker believed.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN