20230428-招银国际-友邦保险-01299.HK-Strong_1Q23_momentum_6页_1mb

Summary of AIA Group Ltd. (1299 HK) Report

Analyst Recommendation: BUY

Key Highlights:

• AIA Group Ltd. reported strong results in 1Q23 with double-digit growth in the value of new business (VNB), achieving 28% CER and 23% AER year-over-year growth.
• Reiterate BUY rating with a 5% increase in VNB forecasts for FY23E-FY25E.
• Target price remains at HK$118.00, indicating a 38.5% upside from the current price of HK$85.20.

Financial Overview:

• Trading at 1.6x P/EV FY23E, below 2-year (1.7x) and 5-year (1.9x) historical averages.
• VNB showed significant growth across HK, China, ASEAN, and India markets, driven by economic recovery and favorable conditions.
• Limited exposure to US/EU banking crisis, with minimal holdings in affected bonds.
• Good returns, including 18.2% ROE in FY23E and improving profitability metrics.

Growth Catalysts:

• Strong recovery in mainland China life insurance demand.
• Geographic expansion approved, including entry into Zhengzhou, Henan province.
• Revival of MCV business in Hong Kong since reopening in Feb 2023.
• Pent-up demand in the Hong Kong market rebounding significantly.

Valuation and Market Position:

• Forward P/EV at 1.6x, below historical averages.
• Focus on sustainable growth from HK and mainland China business.
• Valuation supported by double-digit VNB growth and enhanced agency partnerships.
• Earnings projections show net income rising to HK$9.234 billion in FY25E.

The report identifies potential risks from Market conditions and policy changes.