Bank of America Securities: Maintaining AIA's (01299) “Buy” Rating Target Price of HK$100

The Zhitong Finance App learned that Bank of America Securities released a research report stating that it maintains AIA Insurance's (01299) “buy” rating and that the target price of HK$100 remains unchanged. It believes that the current valuation of the stock is equivalent to 1.2 times the predicted 2026 stock price to include value (P/EV), which is 1.3 times lower than this year's average.

AIA will announce the results for the first half of 2026 on August 21. Bank of America Securities published a report predicting that based on the actual exchange rate, the new business value (VNB) will increase 14% year over year and 11% when measured at a fixed exchange rate. The bank expects the value of the new business to increase by 10% in the second quarter based on the actual exchange rate, mainly driven by mainland China business, but the growth rate is slower than 17% in the first quarter, mainly due to a surge in sales in Hong Kong in the second quarter of last year due to changes in demonstration interest rates, which formed a high base. The bank also expects that after AIA completes this year's share repurchase, operating profit per share after tax will increase 12% year over year.

According to market segmentation, Bank of America expects AIA China's new business value to increase by 28% year on year in the first half of the year, and the growth rate is expected to slow to 20% in the second quarter (increase of about 30% in the first quarter). Mainly affected by seasonal factors, the overall trend is still steady, partly due to the low base for the first half of last year. The bank expects AIA China's new business value margin to drop to 56% from 59% in the first half of last year, but the increase in premium scale supports the new business value momentum.

In the Hong Kong market, the bank expects the value of new business to increase 11% year-on-year in the first half of the year, but its forecast for the second quarter is conservative, as the base for the second quarter of last year was high and cross-border capital transfer activities are likely to receive more attention. The bank's view on AIA Hong Kong over the next two to three years is that if there is no major regulatory tightening of mainland visitors to Hong Kong, the pace of normalization growth will be 15% compared to the same period last year. The value of new business in the Thai market is expected to fall 4% year on year, but the second quarter is expected to increase positively by 11%, which did not fully offset the decline in the first quarter, and the trend is expected to improve further in the third quarter. The value of new businesses in Singapore, Malaysia and other markets is expected to increase 12% year over year. Some smaller markets are expected to record an increase of more than 15% due to a lower base in the first half of last year.