Investment Rating - The industry investment rating is "Outperform the Market" [8] Core Insights - AIA Group's 2025 H1 performance shows a steady increase in new business volume and value, with annualized new premiums reaching USD 4.942 billion, a year-on-year increase of 8% [4] - The new business value (NBV) is approximately USD 2.838 billion, reflecting a year-on-year growth of 14% [4] - The NBV margin (NBVM) stands at 57.7%, up by 3.4 percentage points year-on-year [4] - The embedded value (EV) is about USD 70.853 billion, showing no year-on-year change [4] Summary by Sections Business Performance - AIA's mainland China business shows resilience, with annualized new premiums slightly declining to USD 1.268 billion, and NBV at USD 743 million, a year-on-year decrease of 4% but a 10% increase when excluding economic assumption changes [5] - The Hong Kong business has strong growth, with annualized new premiums increasing to USD 1.609 billion and NBV at USD 1.063 billion, a year-on-year increase of 24% [5] - The NBV margin for Hong Kong reached 65.8%, with local customer NBV growing by 18% and mainland visitor NBV by 30% [5] Channel and Product Analysis - The partner distribution channel continues to grow, with NBV increasing by 8% year-on-year, while bancassurance NBV rose by 10% [6] - Traditional protection, participating, and investment-linked products contribute significantly to NBV, accounting for 89% of the total [6] Investment Recommendations - The report suggests that AIA's stable NBV in mainland China and high growth in visitor NBV reflect ongoing demand for savings among residents [7] - The insurance sector is expected to maintain stable performance due to regulatory guidance aimed at mitigating risks associated with interest rate differentials [7] - The report recommends focusing on companies with more resilient asset sides, such as Xinhua Insurance and China Life [7]

Investment Rating - The report maintains a "Buy" rating for AIA Group Limited with a target price of HKD 83.9 [2][10]. Core Insights - AIA Group Limited reported a 2024 NBV of USD 4.712 billion, representing an 18% year-on-year increase. The embedded value equity reached USD 71.6 billion, with a 9% increase per share after accounting for dividends and share buybacks. The after-tax operating profit was USD 6.605 billion, up 12% per share, and the basic free surplus generated was USD 6.327 billion, reflecting a 10% increase per share. The final dividend per share was HKD 1.3098, a 10% increase year-on-year [2][10]. Summary by Sections AIA China - In Q4, AIA expanded into four new cities, contributing approximately 30% of potential clients. The NBV increased by 20% to USD 1.217 billion, with an NBV margin up by 4.9 percentage points to 56.1%. The annualized new premium rose by 10%, and total premiums increased by 18%. The improvement in value rate was driven by a shift towards tax-advantaged retirement products and policy adjustments [4][10]. AIA Hong Kong - AIA Hong Kong showed leading growth with an NBV increase of 23% to USD 1.764 billion, and an NBV margin up by 8 percentage points to 65.5%. The annualized new premium grew by 9%, while total premiums increased by 8%. The value rate improvement was attributed to a higher proportion of participating products and the introduction of a series of health insurance products [4][10]. Major Southeast Asian Markets - Thailand: NBV increased by 15% to USD 816 million, with an NBV margin of 99.5%. AIA maintained its leading position in the Thai market through enhancements in agency channels and product innovation. - Singapore: NBV rose by 15% to USD 454 million, but the NBV margin decreased by 16.8 percentage points to 50.5%, mainly due to a higher proportion of long-term savings products. - Malaysia: NBV increased by 10% to USD 349 million, with a slight decrease in NBV margin by 0.2 percentage points to 67.3% [5][10]. Other Markets - The total NBV from other markets increased by 18% to USD 467 million, with growth observed across all markets [5][10]. Financial Performance - AIA achieved a net investment return of 4.3%, with total investment yield remaining stable at 4.8%. Total investment assets grew by 7.5% year-on-year to USD 288.621 billion. The asset allocation showed a decrease in bond proportion by 4 percentage points to 18%, while equity and fund investments increased [10][11]. Investment Recommendations - The report suggests that AIA's NBV is expected to continue steady growth, particularly in markets like Hong Kong and Thailand. The EPS forecasts for 2025-2027 have been adjusted upwards to USD 0.72, USD 0.77, and USD 0.83 respectively. The P/EV valuation remains at 1.5x, supporting the target price of HKD 83.9 [10][11].