Goldman Sachs has released a research report maintaining a "Buy" rating on AIA (01299) with a target price of HK$95.
The company's third-quarter value of new business (VONB) declined by 5% and 4% at constant exchange rates and actual exchange rates respectively to US$1.415 billion, coming in 2% below the bank's expectations and 1 percentage point below market consensus.
The bank expects the market's initial reaction to the third-quarter business update to be relatively muted, as the VONB decline had been well anticipated and the overall performance was broadly in line with both its own and market expectations.
However, Goldman Sachs noted that three aspects of the third-quarter performance could deliver positive surprises: first, Hong Kong market performance exceeded expectations, with VONB declining 3% year-on-year, better than the bank's previous forecast of a 6% decline; second, Thailand market achieved positive growth despite a high base; third, growth was strong at the end of the quarter, with September VONB growing more than 25% year-on-year, and Hong Kong market combined August and September growth of approximately 20% year-on-year.
The bank stated that the third-quarter underperformance was mainly dragged down by the Chinese mainland market, where VONB declined 33% year-on-year, compared to the bank's previous forecast of an 8% decline.
The base effect from product repricing in July and August 2025, as well as disruptions to the bancassurance channel in 2026, both had a greater impact than expected.
Nevertheless, the bank was encouraged by the significant increase in the proportion of protection-type product sales within the agent channel, with agent channel VONB returning to strong growth in September.
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