UBS Maintains AIA Buy Rating, Market Appears to Have Largely Priced in Worst-case Scenario

UBS said in a research report that the market appears to have largely priced in the worst-case impact of Decree No. 837 on Mainland China Visitor (MCV) insurance business, assuming future value of new business (VNB) from mainland visitors would be zero. The broker believes that as long as the regulatory outcome does not involve a complete ban on new business from mainland visitors, AIA (01299.HK) +1.000 (+1.356%) Short selling $1.23B; Ratio 21.597% shares have upside potential and current concerns seem excessive.UBS cited three supporting factors. First, discussions with intermediaries such as agents indicate that operations, including sales and premium payments, remain stable. The Hong Kong Monetary Authority’s recent restrictions on bank investment accounts only target securities transactions and are unrelated to insurance purchases or payments. Second, mainland visitor insurance business remains feasible under the regulatory frameworks of both Mainland China and Hong Kong. Third, Hong Kong Financial Secretary Paul Chan made constructive remarks at an event on 10 June 2026, reiterating the central government’s strong support for Hong Kong. In addition, benefiting from intensive promotional activities since mid-May, UBS expects AIA Hong Kong’s VNB performance in the second quarter may exceed market expectations.UBS added that apart from regulatory uncertainties surrounding the Hong Kong mainland visitor segment, AIA’s other businesses remain fundamentally solid and the group has a strong track record in navigating crises. The broker expects AIA to remain attractive in the Mainland China market, forecasting a VNB CAGR of 18% for FY2025-FY2030. For new geographies entered after 2019, it targets a VNB CAGR of 40% for FY2025-FY2030. The stock is currently trading at 1.04x its forecast 12-month forward price-to-embedded value (P/EV), with an operating return on embedded value (RoEV) of 16%, offering an attractive risk-reward profile. The broker reiterated its Buy rating on AIA and maintained its TP at HKD104. (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-06-11 16:25.)