Ge Long Hui·2025-08-21 19:59Core Viewpoint - AIA Group reported a robust growth in New Business Value (NBV) for 1H25, with a year-on-year increase of 14% on a constant currency basis, primarily driven by the Hong Kong and Southeast Asian markets [1] Group 1: Hong Kong Market Performance - The NBV in Hong Kong experienced a strong year-on-year growth of 24% in 1H25, an increase from 16% in 1Q25, despite a high base [1] - Both mainland visitors (MCV) and local residents contributed significantly, with growth rates of 30% and 18% respectively [1] - The company recruited 15% more agents year-on-year, with the agent channel's NBV growing by 35% [1] - The bancassurance channel also saw a high growth of 27% in NBV, while the professional intermediary channel's growth was weaker at 3% [1] - Regulatory changes in Hong Kong regarding dividend insurance demonstration rates may have stimulated sales in the second quarter [1] - The company expects the MCV business to maintain strong growth momentum, projecting a 24% increase in Hong Kong's NBV for 2025 [1] Group 2: Mainland China Market Performance - The NBV in mainland China declined by 4% year-on-year in 1H25, primarily due to adjustments in the EV assumptions from the previous year [2] - Excluding the impact of these assumptions, the NBV would have increased by 10%, with a comparable year-on-year growth of 15% in 2Q25 [2] - The agent channel in mainland China contributed over 80% to the NBV, indicating a solid performance [2] - The NBV profit margin for 1H25 was 58.6% (on an ANP basis), showing a significant improvement due to the assumption adjustments [2] - The company opened nine new regions in mainland China since 2019, with a 36% year-on-year growth in NBV from these new areas, which accounted for 8% of the mainland market [2] - AIA has set a new growth target for the NBV in these new regions at a CAGR of 40% from 2025 to 2030 [2] - The company anticipates a 1% growth in mainland China's NBV for 2025 [2] Group 3: Southeast Asia Market Performance - The Southeast Asia market maintained a solid growth trajectory, with NBV growth rates of 35%, 16%, and -3% for Thailand, Singapore, and Malaysia respectively in 1H25 [2] - The high growth in Thailand may be linked to the "stop-sale" of older medical insurance products, which could pose challenges for growth in the second half of the year [2] - Other markets in Southeast Asia saw a 14% year-on-year increase in NBV, with India experiencing a notable growth of 38% [2] - The company expects a 14% growth in NBV for the Southeast Asia market (including Singapore, Malaysia, and Thailand) in 2025 [2] Group 4: Financial Performance and Forecast - The company's OPAT grew by 6% year-on-year in 1H25, with a 12% increase in OPAT per share, aligning with the company's CAGR guidance of 9%-11% for 2023-2026 [3] - The return on equity (ROE) for 1H25 was 18%, indicating strong performance [3] - The interim dividend per share was HKD 0.49, reflecting a 10% year-on-year increase, with total returns to investors (including buybacks) amounting to USD 3.7 billion [3] - The company projects a 5% growth in OPAT per share for 2025, with an estimated ROE of 17% [3] - The estimated dividend yield (including buybacks) for 2025 is expected to reach 4.7%, with an overall NBV growth forecast of 13% for 2025 [3] - The company has adjusted its 2025 EPS forecast down by 22% to USD 0.49, while maintaining the EPS forecasts for 2026 and 2027 at USD 0.70 and USD 0.79 respectively [3] - The target price remains unchanged at HKD 85, based on book value and intrinsic value methods, with a "buy" rating maintained [3]