The Zhitong Finance App learned that Goldman Sachs released a research report stating that it maintains AIA's (01299) “buy” rating. The bank believes that the decline in AIA's new business value (VONB) for the third fiscal quarter has been fully anticipated before, and the overall forecast is basically in line with the bank's and market consensus (based on the company's aggregated data). Goldman Sachs expects AIA to regain the momentum of double-digit growth in the value of the new business in the fourth fiscal quarter of 2026.
Goldman Sachs pointed out that investors may be surprised by several results in the third fiscal quarter: first, the Hong Kong market performed better than expected; the value of the new business fell 3% year on year, better than the bank's previous forecast of 6%; second, the Thai market achieved positive growth, despite facing challenges caused by the base effect; third, growth was strong at the end of the quarter. The value of new business increased by more than 25% year on year in September, of which the Hong Kong market increased 20% in August and September.
The bank said that AIA's third-fiscal quarter results fell short of expectations and were mainly dragged down by the mainland China market. The value of new business in this market fell 33% year over year, while Goldman Sachs previously predicted a decline of 8%. The base effect brought about by product repricing in July and August 2025, as well as disruptions to banking insurance channel business in 2026, all exceeded expectations. However, the share of sales of agent channel guarantee products increased significantly, and the channel's new business value resumed strong growth in September.
Looking ahead, Goldman Sachs believes that the impact of the base effect has basically subsided. It is expected that AIA Insurance's new business value will regain double-digit growth momentum in the fourth fiscal quarter of 2026, while the Hong Kong and mainland China markets are both expected to achieve double-digit growth in the 2027 fiscal year.
In terms of valuation, AIA's current valuation is equivalent to 1.0 times the share price to included value ratio (P/EV) for the 2027 fiscal year, which is lower than the historical average of 1.1 times and 1.4 times for the past 3 and 5 years, respectively. According to the bank's estimates, the company's total shareholder return (TSR) for the 2027 fiscal year could reach 5.4%.