CICC: Maintaining AIA's (01299) “outperforming the industry” rating, the target price of HK$95.4 is expected to increase the value of the new business by 8% year-on-year in the first nine months

The Zhitong Finance App learned that CICC released a research report that the new business value (VONB) of AIA Insurance (01299) is expected to increase 8% (actual exchange rate, AER) and 6% (fixed exchange rate, CER) year over year to US$4.659 billion in the first nine months of 2026, corresponding to a 2% year-on-year decline (AER) in VONB in a single quarter in the third quarter, mainly due to businesses in mainland China and Hong Kong facing high base pressure. The bank kept the company's profit forecast for 2026 and 2027 unchanged. Considering the new business growth trend, the bank lowered the VONBPS forecast by 2.5%/2.7% to $0.57/0.65 for the same period, and lowered the EVPS forecast by 0.2%/0.4% to $8.18/9.21. The bank maintains a “outperforming the industry” rating and target price of HK$95.4, corresponding to the 2026 and 2027 forecasts of P/EV of 1.5 times and 1.3 times, respectively, with 34% upside compared to the current stock price.

CICC's main views are as follows:

The Hong Kong business in China will experience negative year-on-year growth in a single quarter under a high base, but the new business trend will remain steady from month to month

In the second to third quarter of 2025, AIA Hong Kong had a high base due to pre-sales due to adjustments in main sales products. The bank expects a year-on-year decline in VONB in the third quarter of 2026, which is in line with industry trends; however, from a month-on-month perspective, the new business trend in the third quarter may be relatively steady. Entering the fourth quarter, the base will drop significantly, and the growth rate of new business may pick up significantly.

The business in mainland China is also facing a high base, and the year-on-year growth rate may weaken significantly

AIA China had a high upfront sales base due to lower pricing interest rates in the third quarter of 2025, while in the third quarter of 2026, the China Financial Supervisory Authority strengthened the “integration of reporting and banking” of banking insurance, which had an adverse impact on channel sales intentions in the short term. The bank believes that the above factors may have caused AIA China's new business growth in the first nine months of 2026 to decline significantly compared to the first half of the year, which is in line with industry trends; it is likely that there will be a certain recovery in the fourth quarter under a low base.

Major markets in Southeast Asia may continue the previous growth trend, and Thailand faces a certain high base

The bank expects that AIA's Singapore and Malaysia business as a whole will continue the growth trend in the first half of 2026, while AIA Thailand had a high base in the third quarter of 2025 due to the use of short-term sales incentives, and the year-on-year growth performance in a single quarter may be weak.

The long-term growth trend outlook is optimistic, and market expectations may need to be boosted by financial data or company guidance

The market is currently worried about the sustainability of AIA Hong Kong and the Group's rapid growth in 2027 and beyond, and whether mainland China's visitor business will be affected by mainland China's strengthened foreign investment tax policy for Chinese residents. The bank is optimistic about the long-term trend of AIA's business in mainland China and Hong Kong, but believes that market expectations may need to wait for financial data or company guidance to be boosted.

Profit forecasting and valuation

AIA is currently trading 1.1 times and 1.0 times P/EV forecasts for 2026 and 2027. CICC kept the company's profit forecast for 2026 and 2027 unchanged. Considering the new business growth trend, CICC lowered its VONBPS forecast by 2.5% and 2.7% to $0.57 and $0.65 for the same period, corresponding to a 0.2% and 0.4% reduction in the EVPS forecast to $8.18 and $9.21. The bank maintained its “outperforming the industry” rating and target price of HK$95.4. The P/EV forecast for 2026 and 2027 was 1.5 times and 1.3 times, respectively, with 34% upside compared to the current stock price.

Risk Alerts

Premium growth in new businesses fell short of expectations; fluctuating US bond interest rates; overseas financial risk events; regulatory uncertainty.