UBS: Maintains "buy" rating for AIA (01299), the market seems to have largely reflected the worst situation.

UBS released a research report stating that the current market seems to have largely reflected the worst-case scenario of the impact of Ordinance No. 837 on Mainland Visitor (MCV) insurance business, assuming zero future value of Mainland Visitor New Business (VNB). The bank believes that as long as the regulatory outcome does not completely ban new business from Mainland visitors, AIA (01299) has the potential for upward movement in its stock price, and the current concerns appear excessive. The bank reiterates its "buy" rating on AIA, with a target price of HK$104 unchanged. UBS listed three major supporting factors: Firstly, discussions with intermediaries such as agents show that operations including sales and premium payments remain stable, and recent restrictions by the Hong Kong Monetary Authority on bank investment accounts only apply to securities trading, not insurance purchases or payments; Secondly, the Mainland Visitor insurance business is feasible under the regulatory framework in Mainland China and Hong Kong; Thirdly, Hong Kong Financial Secretary Paul Chan Mo-po made constructive comments at an event on June 10, 2026, reaffirming the high support of the central government for Hong Kong. Additionally, thanks to intensive promotion activities since mid-May, UBS expects that AIA's new business value performance in the second quarter may exceed market expectations. UBS adds that aside from regulatory uncertainties surrounding the Hong Kong Mainland Visitor business, AIA's other businesses remain fundamentally sound, with a good track record of crisis management. The bank expects AIA to be attractive in the Mainland China market, with a compound annual growth rate of new business value reaching 18% for the fiscal years 2025 to 2030; at the same time, for new regions entered after 2019, it aims to achieve a 40% compound annual growth rate of new business value for the fiscal years 2025 to 2030. The stock is currently valued at 1.04 times the forecasted 12-month forward embedded value price-to-earnings ratio (P/EV) and offers an attractive risk-return ratio with an operating embedded value return rate (RoEV) of 16%.