Soochow Securities·2025-08-21 07:15Investment Rating - The investment rating for AIA Group Limited is "Buy" (maintained) [1] Core Views - The report highlights that both New Business Value (NBV) and NBV Margin have increased, with a mid-year dividend per share rising by 10% year-on-year [1] - The company reported a mid-year NBV of $2.84 billion, a year-on-year increase of 14%, with a quarterly growth of 18.9% in Q2 [1] - The annualized new premium reached $4.94 billion, reflecting an 8% year-on-year growth [1] - The after-tax operating profit was $3.6 billion, up 6% year-on-year, aligning with the company's three-year target guidance [1] - The net profit was reported at $2.53 billion, a decrease of 24% year-on-year [1] - The embedded value stood at $70.9 billion, remaining stable since the beginning of the year, with an operating profit of $5.9 billion, up 9% year-on-year [1] - The report anticipates continued strong growth in Hong Kong and the mainland China markets, supported by the establishment of new branches [1] Summary by Sections Financial Performance - Insurance revenue is projected to grow from $17.514 billion in 2023 to $21.897 billion by 2027, with a compound annual growth rate (CAGR) of approximately 4.43% [1] - After-tax operating profit is expected to increase from $6.213 billion in 2023 to $8.307 billion by 2027, with a CAGR of about 8.37% [1] - Earnings per share (EPS) is forecasted to rise from $0.36 in 2023 to $0.93 by 2027 [1] - The embedded value (EV) per share is projected to grow from $6.42 in 2023 to $7.88 by 2027 [1] - The price-to-embedded value (P/EV) ratio is expected to decrease from 1.49 in 2023 to 1.21 by 2027 [1] Business Segments - The report indicates that Hong Kong remains the largest contributor to the group's NBV, accounting for 35% of the total, with a year-on-year increase of 24% [1] - The mainland China market showed a 10% year-on-year increase in NBV, with a quarterly growth of 15% in Q2 [1] - Thailand's NBV increased by 35% to $520 million, while Singapore's NBV rose by 16% to $260 million [1] - The overall NBV Margin improved by 3.8 percentage points to 57.7% [1] Investment Strategy - The company has reduced its allocation to fixed income while maintaining a stable proportion of equity assets [1] - The annualized net investment return rate was reported at 1.9%, a decrease of 0.1 percentage points year-on-year [1] - The report maintains previous profit forecasts, projecting embedded values of $73 billion, $77.6 billion, and $82.8 billion for 2025, 2026, and 2027, respectively [1]