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<Research>UBS Forecasts AIA (01299.HK) 1Q24 VNB to Hike 20% on AER Basis
Recommend 25 Positive 53 Negative 23 |
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UBS highlighted in a report that AIA (01299.HK) would announce its 1Q24 results at the end of April. The broker expected its value of new business (VNB) to rise by 20% and 23% on an actual exchange rate (AER) and constant exchange rate (CER) basis respectively, compared to market expectations of 19% and 22%. The broker noted that the macro environment was unfavourable in 1Q, but forecasted embedded value and net profit after tax to return to growth for the full year. UBS set a target price of $90 for AIA, with a Buy rating. The report noted that AIA's Hong Kong VNB is set to grow strongly QoQ and maybe even higher YoY as Hong Kong only reopened the border in early February last year. Margins are not expected to change significantly QoQ as the product mix of the Mainland China Visitor (MCV) segment is broadly stable. On a YoY basis, margins are estimated to be affected by changes in customer mix, with margins for MCV business being lower than those for domestic customers, as MCV business is mainly savings-based. The broker believed AIA would log respectable YoY VNB growth in the mainland market, benefiting from higher gross margins, mainly due to bancassurance commission reform and lower pricing interest rates. In addition, Southeast Asia and other markets are expected to achieve double-digit growth overall. Thailand's annualised new premiums have elevated 26% YoY in the first two months of 2024, while the broker expected Singapore and Malaysia to record positive VNB growth in 1Q. AAStocks Financial News |
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