Goldman Sachs: Maintains "Buy" rating on AIA (01299), expects new business value to regain double-digit growth in Q4

Goldman Sachs: Maintains "Buy" rating on AIA (01299), expects new business value to regain double-digit growth in Q4 Goldman Sachs released a research report maintaining a "Buy" rating on AIA (01299). The bank believes that the decline in AIA's value of new business (VONB) in the third fiscal quarter had been fully anticipated and was broadly in line with its own and market consensus forecasts (based on company-aggregated data). Goldman Sachs expects AIA to regain double-digit VONB growth momentum in the fourth fiscal quarter of 2026. Goldman Sachs noted several aspects of third-quarter performance that may surprise investors: first, Hong Kong market performance beat expectations, with VONB down 3% year-on-year, better than the bank's prior forecast of a 6% decline; second, the Thailand market achieved positive growth despite base-effect challenges; third, growth was strong at quarter-end, with September VONB up more than 25% year-on-year, including combined growth of 20% in the Hong Kong market in August and September. The bank said AIA's third-quarter results fell short of expectations, mainly dragged by the mainland China market, where VONB fell 33% year-on-year versus Goldman Sachs' prior forecast of an 8% decline. The base effect from product repricing in July and August 2025, as well as disruptions to bancassurance channel business in 2026, both had a greater impact than expected. However, the share of protection-type product sales through the agency channel rose significantly, and the channel's VONB resumed strong growth in September. Looking ahead, Goldman Sachs believes the impact of the base effect has largely faded and expects AIA's VONB to regain double-digit growth momentum in the fourth fiscal quarter of 2026, while both the Hong Kong and mainland China markets are expected to achieve double-digit growth in fiscal year 2027. On valuation, AIA currently trades at 1.0x price-to-embedded-value (P/EV) for fiscal year 2027, below its historical averages of 1.1x and 1.4x over the past three and five years, respectively. According to the bank's estimates, the company's total shareholder return (TSR) could reach 5.4% in fiscal year 2027.