2025年上半年回顾：VONB韧性增长，对中国增长战略持乐观态度

AIA Group Ltd. (1299 HK) 1H25 review:ResilientVONBuptrendwithoptimisticoutlook onChina Growth Strategy Target PriceHK$89.00Up/Downside21.2%Current PriceHK$73.45 AIAreportedresilient 1H25 results.VONBrose14% (CER)YoYtoUS$2.84bn,inline with our estimate ofUS$2.85bnandtranslating to 2Q VONB growth at 17%(CER, vs.1Q25: 13%).Thisuplift was mainly driven by margin expansion, as VONBmargin grew 3.9pct YoY to 57.7% in 1H25, a record high since FY23,with asurprisefromAIA China’s VONB margin, which wasup 2.0pct YoY to 58.6%,thehighest postpandemic.We see continued positive trends in product mix as 89% oftotal VONB was from protection and fee-based insurance products with lowornoguarantees(Fig.1).The promising trend of AIA China’s VONB margin can beattributedto 1)alllong-term savings products sold in agencywereshifted to par(vs. 1-2M25: >80%); 2)proactiverepricing; and 3) lengtheningpolicypaymentperiods.TheuniqueAIAChina growth strategy is the key highlight oftheresultsand AIA targets a 40% VONB CAGR in FY25-30E for the 9 newgeographies enteredpost-2019.Operating RoEV and Operating ROE both hit arecord to 17.8%/16.2%, up 2.9pct/1.4pctYoY,thanks toprofitablenew businessand solidearnings growth.In 1H25, dividends and buybacks totalled US$3.7bn, up10%YoYwith the shareholder capital ratio down17pctfromyear-startto 219%.Maintain BUY, with targetprice based on appraisal valueat HK$89.0(unchanged),VONB growth variedacrossmarkets.In 1H25, Group VONBrose14%YoY China Insurance Nika MA(852) 3900 0805nikama@cmbi.com.hk StockData Auditor: PwC Related reports: 1.Decent VONB growth across ex-Chinamarkets; buybacks to complete faster thanexpected, May 2, 2025 2.新业务价值增长具备韧性，新一轮回购计划提升股东回报至6%,Mar 18, 20253.Robust VONB growth in-line;newbuyback of US$1.6bn implying 6% totalS/H returns,Mar 18, 20254.FY24 preview: OPAT back to growthtrajectory; resilient VNB despite modestslowdown in 2H, Feb 24, 20255.1H24 VNB beat with margin recovery;expecttotal>US$7bn cash returns toshareholders in FY24, Aug 26, 20246.FY23 VNB +33% in line; strong MCVmomentum sustained to 1-2M24, Mar 18,2024 Operating ROE/ROEVhita record.OPATper share was up12% in 1H25,driven by robust CSM release (+9%)andenhancedoperating variances (+2x),offset bytheGlobal Minimum Tax’s(GMT)first timetop-up effect(-US$136mn).New business CSMgrew15% to US$4.4bnin linewith VONB,propelling thegrowth of OPAT. Operating ROEgrew1.4pct YoYto 16.2%,drivenby robustearnings andimproved operating efficiency.EV operating profit per sharejumped15% YoYin 1H25,resulting ina 2.9pctincrease ofoperating RoEV to17.8%, a record high.We revise up our forecasts onFY25-27EOPATpershare by2%/2%/3%to US$0.67/0.75/0.84(table)given improved claimsexperienceandahighermix ofparproductsthatrequire low guaranteesforinvestment returnaidedby adisciplinedfinancial management. Valuation/Key risks.Thestock is tradingat1.3xFY25E P/EV, or 2.2x P/B withdividend yield at 2.6%. We expectthetotal shareholder return tobe5.1% inFY25E (2.6% dividend + 2.5% buyback). The insurer raised interim DPS by 10%to US$49cents,butdid notannounce buybacks in 2H25Eonthecall.We thinkthe marketis more convinced to a growth story of AIA,rather than a high-yieldstock. Thus, theambitiousChina Growth Strategy (40% VONB CAGRin FY25-30Efor the 9 new geographies after 2019) will be an appealing catalyst.Maintain BUY with TP (unchanged) at HK$89,which implies1.6x FY25E P/EV. Future catalysts 1)Better-than-expected interest rate movements and equity market performances; 2)Rapid margin expansions amid strong momentum in premium sales growth; 3)On track delivery of AIA China’s Growth Strategy, and faster-than-expected newregions expansion (current annual target: 1-2 regions); 4) Sir Mark Tucker’son-boardas the GroupBoard ChairmaninOct,2025to bringa newclear-cuttop-downstrategy; 5)Prudent capital managementto maintain shareholder capital ratio well above200% (1H25: 219%, down 17pct from year-start), etc. Downside risks 1)Heightened stock market fluctuationsand unexpected shock to interest rates andFX movements; 2)Prolonged low interest rate in mainland China;3)Sluggish salesmomentum and margin retreats;4) Significant drop in shareholder capital ratio and free surplus balance;5) Tightened underwriting policies across AIA’ s operating markets, etc. Key forecast changes Charts Source: Company data, CMBIGM Source: Company data, CMBIGM Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflecthis or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirmsthat neither the analyst nor his/her associates (as