<News Alert> AIA (1299HK, BUY) announced 1Q22 VONB result with 18% y-o-y decline, in-line with expectations
AIA announced 1Q22 new business result with VONB decreased 18% y-o-y to $853mn, in-line with consensus forecast
The Value of new business (VONB) decline was primarily due to the temporary disruption from the COVID-19 pandemic and the high base from its Mainland China operation in 1Q21. But management claims sales activity rebound in markets where COVID-19 case fallen substantially from the peak.
AIA China remains the largest VONB contributor to the group, achieving double-digit growth in new recruits and making strong progress in establishing new branch in Wuhan, Hubei.
AIA Hong Kong reported an increase in VONB compared to 1Q21, supported by growth from Premier Agency and partnership channels. Macau branch achieved substantial VONB by absorbing more Mainland Chinese visitors.
VONB margin decreased by 7.6ppts to 54.4% due to product mix shift in Mainland China and increased acquisition expense that together reduced sales volumes, ANP declined by 7% to $1.6bn.
We maintain BUY on AIA with unchanged TP of HK$127.0
