UBS expects AIA's new business value to increase by 12% year-on-year at constant exchange rates in the first quarter, rating it as "Buy."

UBS published a research report indicating that AIA (01299.HK) is expected to announce its first-quarter results for the fiscal year 2026 on April 30, with a forecasted new business value (VNB) growth of 12% year-on-year at constant exchange rates (CER), exceeding market expectations of 9%, and a growth of 16% at actual exchange rates. The report noted that there is significant divergence among market analysts, with major disputes focusing on the Hong Kong and Thailand markets.

UBS estimates that AIA's new business value in Hong Kong will grow by 20% year-on-year in the first quarter, lower than the approximately 25% growth in the fourth quarter of last year, mainly considering that the strong sales in September last year were affected by regulatory changes and continued into October. The bank believes that although some analysts are concerned that the commission-sharing requirements implemented this year may impact the brokerage channel, AIA's reliance on the brokerage channel is limited, and the commission structure is relatively balanced.

In the Thailand market, the new business value is expected to decline year-on-year in the first quarter, with a decrease of about 15%. At the same time, profit margins are expected to drop significantly from 116% in the first quarter of 2025 to below 100% in the first quarter of this year. Despite facing pressure in the first quarter of this year, it is still expected to maintain robust growth for the entire year of 2026, with a lower base in subsequent quarters.

Regarding the Chinese market, UBS stated that AIA's new business value surged over 20% in the first two months, and it is expected to maintain growth momentum in March, although the growth rate may lag behind some leading domestic peers.

The bank raised its earnings per share forecast for AIA in 2026 by 12% to reflect the improvement in stock market performance since the last model update; the target price remains unchanged at HKD 104; the rating is "Buy."