The Zhitong Finance App learned that Goldman Sachs released a research report stating that it maintains AIA's (01299) “buy” rating, with a target price of HK$95. The company's new business value (VONB) for the third quarter decreased by 5% and 4% to US$1,415 million at the fixed exchange rate and actual exchange rate, respectively. It was 2% lower than the bank's forecast and 1 percentage point lower than the market's forecast. The bank expects that the initial reaction of the market to the business update in the third quarter will be relatively lackluster, as the decline in VONB has been fully anticipated, and the overall performance is generally in line with the bank's and market expectations.
However, Goldman Sachs pointed out that there are three aspects of performance that may bring positive surprises: first, the Hong Kong market performed better than expected, with VONB falling 3% year on year, better than the bank's previous forecast of 6%; second, the Thai market achieved positive growth under a high base; third, strong growth at the end of the quarter. VONB grew more than 25% year on year in September, and the Hong Kong market increased by about 20% year on year in August and September.
The bank said that its performance in the third quarter was mainly dragged down by the mainland China market. VONB declined 33% year over year, compared with the bank's previous forecast of an 8% decline. The base effect brought about by product repricing in July and August 2025, as well as the disruption of banking insurance channels in 2026, all exceeded expectations. However, the bank was encouraged by the significant increase in the sales mix of agent channel guarantee products. Agent channel VONB resumed strong growth in September.
In other markets, Thailand's VONB grew 9% year on year and improved quarterly, better than the forecast; Singapore VONB grew 22% year on year, faster than the 10% increase in the first half of the year; Malaysian agent channel growth accelerated, driving VONB in the region to increase 10% year on year; and VONB in other markets increased 14% year over year.
Looking ahead, the bank believes that the impact of the base effect has largely subsided. AIA expects VONB to regain double-digit growth in the fourth quarter, and the Hong Kong and mainland China markets are also expected to achieve double-digit growth in the 2027 fiscal year. AIA's current stock price is equivalent to about 1 times the 2027 forecast P/EV, which is 1.1 times and 1.4 times lower than the historical average for the past 3 and 5 years. According to the bank's estimates, the total return to shareholders for the 2027 fiscal year was 5.4%. Goldman Sachs believes that the company is attracted to risk and return, and that the recent weakening of stock prices provides a good opportunity to enter the market.