20240318-招银国际-友邦保险-01299.HK-FY23_VNB_+33__in_line__strong_MCV_momentum_sustained_to_1-2M24_8页_1mb

报告摘要

Full-year 2023 results: Value-Based Net Income (VNB) grew 33% YoY (CER basis, equivalent to 30% on AER basis) to US$4,033 million, aligning with forecasts. Adjusted Net Income (ANP) increased 45% YoY (CER basis, 41% on AER basis) to US$7,650 million.
VNB margin narrowed to 52.6% for the year, sequentially improved from 50.7% in H1 2023, driven by strong MCV momentum in key segments, particularly in AIA HK, where VNB rose 82% YoY due to capturing market capitalization value (MCV) demand amid sector slowdown.
OPAT declined 1% YoY on a CER basis, attributed to higher medical claims and lower Contractual Service Margin (CSM) beginning balance, offsetting CSM growth (+6% YoY). CSM growth outpaced OPAT, indicating solid financial health for the Group.

Long-term Growth and Financial Health: Analyst positive on long-term Operating Profit After Tax (OPAT) due to growing CSM release and expected normalization of medical claims through product repricing. Embedded Value (EV) showed strong growth, with operating profit increasing 30% YoY to US$8.9 billion.
Valuation Revision: Price target revised from HK$118 to HK$96.5 (1.8x FY24E Price-to-Embedded Value [P/EV]), reflecting lower assumptions: Long-term Return on Embedded Value (RoEV) reduced from 14% to 11%, risk discount rate lowered from 10% to 9.5%, and investment return included at 8.6%. The new valuation incorporates both Gordon Growth Model and Appraisal Value approach.
Sensitivity: Valuation sensitive to changes in risk discount rate and growth assumptions, with VNB multiplier ranging from 16.7x to 277.2x under varying scenarios.

Growth Drivers: Sustained momentum in long-term savings products amid a low-interest-rate environment, though a potential base effect may pressure performance from 2Q 2024. Continued expansion into new cities in China and rapid bancassurance growth (e.g., 6% of total VNB with margins >30%).
Risks: Adverse impacts from investment return variances, medical claim increases, and macroeconomic uncertainties. Long-term savings growth may face challenges from persistently low rates, and initial OPAT decline could offset gains in CSM-related profits.

Reiterated BUY: Based on organic growth potential, disciplined capital management, and consistent shareholder returns. Target price HK$96.50 implies a upside of 58.2% from the current price of HK$61.00.

P/EV and P/B: Trading at 1.2x FY24E P/EV and 1.7x P/B, valuations are factored into the revised target.
Dividend Yield: Ranges from 2.9% to 3.7% across forecasts, indicating stable income potential.

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