AIA Group 1299 02 (Jun 20 - Dec 27)

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<Research>Nomura Foresees AIA's Strong VONB Growth Intact; 1Q Growth 20% YoY on AER

Nomura, in its report, forecast AIA (01299.HK) 's 1Q24F Value of New Business (VONB) to be US$1.255 billion, representing growth of 20% at actual exchange rate (AER) and 23% at constant exchange rate (CER), with largely stable VONB margin and annualized new premium (ANP) up 19% YoY.

The broker estimated that AIA Hong Kong's VONB will rise 30% YoY, in line with the growth in Mainland Chinese Visitors (MCVs) , and expected VONB in Hong Kong to grow by 16% for 2024 as a whole and by 12% in 2025.

The recent investigations by the Insurance Authority (IA) and the Independent Commission Against Corruption (ICAC) into sales malpractice will have a manageable impact on AIA's Hong Kong business, Nomura opined.

The broker expected VONB for AIA Mainland China to increase by 24% YoY in 1Q24F, in line with management guidance.

The business in Southeast Asia is growing steadily, with VONB up 12% YoY, while other markets are up 4%.

The broker maintained its Buy rating with a target price of $90.88.

Source: AAStocks Financial News

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

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Historically strong bounces from 25% falls

AIA’s share price fell 25% mom on 13 Apr 2024, the third such fall since its 2010 IPO (-25% mom on 4 Oct 2011 and 19 Mar 2020).

The first two 25% fall incidences saw a ≥20% rebound a month after (Fig 1).
Four cases of ≥20% mom rebounds occurred within a year of Mar 2020’s fall.

AIA’s 12-month forward P/EV and P/E (operating) are all >3 s.d. below its post-2017 mean (Figs 3-4). We see its valuations as extremely attractive.

Reiterate Add rating with TP unchanged at HK$95. Remains top sector pick.

Source: CIMB

https://rfs.cgsi.com/api/download?file= ... B344D5A3AD

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A screaming BUY after recent crash

Recent sharp share price correction reflects market concerns over
a) China de-rating,
b) ambiguity over AIA China’s channel strategy,
c) margin dilution risk, and
d) capital management

Mid-to-long-term growth remains robust, with new geographical expansions serving as a strong growth driver.

Trading at forward 0.9x P/EV, we believe market is over-discounting AIA’s long-term value

Expansion in high-end banca channel is a good supplement to its premium agency strategy with manageable margin dilution risk

Lower TP to HK$100 to reflect a prolonged macro risk scenario in China, based on our two-stage growth model. Reiterate BUY

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=19081

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<Research>Citi Forecasts AIA (01299.HK) 1Q VoNB to Rise 21% YoY in AER Terms, Keeps AIA as One of Top Picks

2024/04/22

Citi Research issued a report, expecting AIA (01299.HK) 's value of new business (VoNB) to elevate 24% YoY at constant exchange rate (CER) terms and 21% at actual exchange rate (AER) terms in 1Q24, benefiting from strong business in China and Hong Kong, as well as a lower base due to Covid impacts in January last year.

At CER terms, VoNB is forecasted to grow 22% YoY in the Mainland and 42% YoY in Hong Kong. Mainland Chinese Visitor (MCV) arrivals to Hong Kong in 1Q24 have recovered to 71% of 1Q18.

Excluding Mainland China and Hong Kong, the broker expected the trend in the business of other regions in 2H23 to continue into 1Q24.

AIA remained one of Citi's top picks, with a target price of $100 and a Buy rating.

Source: AAStocks Financial News

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

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<Research>G Sachs Forecasts AIA (01299.HK) 1Q24 VONB to Lift 19% YoY in AER Terms

Goldman Sachs wrote in a report that AIA (01299.HK) will announce its 1Q24 operating data before the market opens on 29 April.

The broker expected AIA to maintain strong growth in value of new business (VONB), up 23% at constant exchange rates and 19% at actual exchange rates, driven by strong growth in Hong Kong, the Mainland and Thailand.

Goldman highlighted that AIA's share price has crumpled by 28% since the announcement of its 2023 results.

The stock is now trading at 1.5x 2024 forecasted P/B ratio, compared with 1.2x of European and 1.3x of US life insurance peers, which is believed to reflect investors' concerns about its shareholder return policy and growth performance of its mainland business.

The broker further believed the company would need to disclose more about its future shareholder returns and the impact of lower interest rates on its Mainland business.

Related News: JPM: AIA PEV Just 0.95x; Div. Adjustment, Regular Shr Buybacks Expected to be Considered to Improve Capital Return

Taking into account the more attractive risk-return profile following the fall in share price, Goldman maintained its Buy rating on AIA and kept the stock on its Conviction Buy List, with a target price of $98.

The broker forecasted AIA to achieve an 11% compound annual growth rate in operating profit after tax from 2024-26, with total shareholder return of US$5.2 billion for 2024 after dividends and buybacks, implying a yield of 7.7%, which may provide short-term support to the share price.

Related News: UBS Forecasts AIA (01299.HK) 1Q24 VNB to Hike 20% on AER Basis

Source: AAStocks Financial News

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

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Apr 23, 2024

Returning to basics: Need VONB beats

What will it take to restore investor confidence? We think the first step needs to be a significant VONB beat vs. Bloomberg consensus at its 1Q24 results.

Consistent strong beats vs. consensus, stable-centric strong VONB growth, plus expansion into new China regions had been past key re-rating drivers.

Capital management initiatives may provide a short-term boost to confidence but we see this less key than strong VONB growth for any major re-rating.

Reiterate Add. TP unchanged at HK$95. AIA is still top sector pick.

Source: CIMB

https://rfs.cgsi.com/api/download?file= ... 44EBE94EDD

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<Research>CLSA Reiterates Buy on AIA (01299.HK), Citing Historically Low Current Valuation

CLSA commented in a report that AIA (01299.HK) has suffered an unexpected drop in share price after disclosing last year's results, which the broker attributes to concerns about the macro environment.

However, the company's fundamentals remained sound.

The broker expected AIA's value of new business to grow by 18% in 1Q24.

With valuation at a historically low level and a 6% return to shareholders, CLSA reiterated its Buy rating on the company and maintained its target price at $80.

Related News: Citi Forecasts AIA (01299.HK) 1Q VoNB to Rise 21% YoY in AER Terms, Keeps as One of Top Picks

Source: AAStocks Financial News

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

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AIA’s first-quarter new business value rises 31%, announces US$2 billion buyback

Hong Kong-based insurer AIA Group on Monday posted a 31 per cent rise in its first-quarter value of new business (VONB) on a constant exchange currency basis and announced an additional US$2 billion share buyback.

AIA’s VONB, which gauges expected profits from new premiums and is a key barometer for future growth, came in at US$1.33 billion in the three months ending March 31 compared with US$1.05 billion a year ago.

Source: REUTERS

https://www.businesstimes.com.sg/compan ... on-buyback

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1Q Results

VONB: +31%; US$1.3b

US$2.0 billion addition to existing share buy-back programme, bringing the total to US$12.0 billion

https://www1.hkexnews.hk/listedco/listc ... 900001.pdf

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AIA Group
What is ‘very strong’?

We forecast 32% 1Q24F VONB growth (AIA-provided consensus is 19%), driven by HK (>35% growth)/ China (>30% growth) strength.

We see very strong HK sequential growth off a high 4Q23 base (which is a seasonally high quarter) as setting the stage for strong 1Q24F yoy growth.

Reiterate Add. TP unchanged at HK$95. AIA is still our sector top pick.

Source: CIMB

https://rfs.cgsi.com/api/download?file= ... 4A846BCBCF