AIA(HK:01299) SINOLINK SECURITIES·2025-03-14 01:09Investment Rating - The report assigns a "Buy" rating for the company, with a target price of HKD 81.10 based on a reasonable valuation of 1.5X PEV [3]. Core Views - The company has demonstrated resilience in new business value (NBV) and is expected to return to double-digit growth in 2023-2024, with a projected NBV margin stabilization [1][2]. - The operational profit has shown steady growth, with a 3.5% year-on-year increase in tax-adjusted operational profit for the first half of 2024 [1]. - The company's embedded value (EV) growth is credible and reflects timely adjustments to investment return assumptions and discount rates [1][29]. - The capital management policy has been optimized, enhancing predictability and stability in shareholder returns, with a dividend payout ratio expected to be over 35% [1][34]. Summary by Sections Company Overview - The company operates in 18 markets across the Asia-Pacific region, with a strong historical presence and a focus on sustainable growth [16]. - It has a diversified ownership structure, with major shareholders being institutional investors, which supports management's decision-making flexibility [19][20]. Financial Performance - The company has shown a compound annual growth rate (CAGR) of 11.6% in operational profit from 2010 to 2022, despite recent challenges [22]. - The insurance revenue is projected to grow from USD 163.19 billion in 2022 to USD 208.10 billion by 2026, reflecting a year-on-year growth of 7.3% [6]. Core Advantages - The company benefits from superior corporate governance, a strong agent network, and a focus on high-potential markets in the Asia-Pacific region [2][41]. - It has a lower cost of liabilities and a more favorable interest margin dependency compared to peers, which enhances its competitive position [2]. Profitability Forecast - The NBV growth rates are expected to be 17%, 9%, and 10% for 2024-2026, with operational profit growth rates of 9% for both 2024 and 2025 [3]. - The embedded value (EV) growth is projected at 3%, 5%, and 7% for the same period, indicating a stable outlook [3]. Shareholder Returns - The company has committed to returning 75% of its annual free surplus to shareholders through dividends and share buybacks, with expected shareholder return rates of 7.4%, 6.5%, and 5.8% for 2024-2026 [34].