媒体报道中止使用银联卡在香港购买保险

>> Employed by a non-US affiliate of MLPF&S and is not registered/qualified as a research analyst under the FINRA rules. Refer to "Other Important Disclosures" for information on certain BofA Merrill Lynch entities that take responsibility for this report in particular jurisdictions. BofA Merrill Lynch does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 9 to 11. Analyst Certification on page 6. Price Objective Basis/Risk on page 6. 11680181 AIA Group Limited Media reports mixed on suspending the use of UnionPay cards to buy insurance in HK Maintain Rating: BUY | PO: 58.00 HKD | Price: 51.40 HKD Equity | 29 October 2016 Reports on suspension of UnionPay cards to buy insurance Bloomberg, in the late evening of 28th Oct, reported that the use of UnionPay credit/debit cards to buy insurance products in HK will be suspended starting 29 Oct 2016. News reports also said the use of Visa and Mastercard cards to purchase insurance products in HK by Mainland visitors could be affected as well since Visa/Master settle via UnionPay. But according to 21st Century Business Herald, UnionPay said that it will not fully suspend the payment if the insurance purchase is for protection, accident/ health, and not for savings-type products. However, media reports noted some insurers have said they will stop accepting UnionPay cards for payment from Mainland customers. Our initial take: Finally it happens Our initial take is this could be the final step of a series tightening measures to curb insurance purchase from Mainland visitors in HK on concerns about capital flight. However, we believe there are still other payment channels that Mainland customers can use. Banning UnionPay cards could increase the transaction cost for Mainland customers and affect HK insurance business, but is unlikely to fully stop their insurance purchases in HK, given strong demand for better quality and cheaper protection products and asset diversification into USD products, which are not available in the China onshore market. What AIA said earlier AIA’s management earlier indicated that they are confident about growth in Hong Kong, indicating one-third of the new premiums are from mainland Chinese customers, out of which the policy above US$5k per purchase and through UnionPay is a small contributor to the AIA group’s total new business. AIA said the majority of payments from mainland business are made by cheque and bank draft. Nearly 80% of the policy average premium is below the US$5,000 limit. (AIA: Positive growth outlook) Scenario analysis: normalized VNB growth 21-24% Even assuming the new restriction hits 50% of mainland visitors’ insurance purchases in HK (mostly single premium), we estimate AIA’s normalized growth can still be above 20%. Estimates (Nov) (USD) 2014A 2015A 2016E 2017E 2018E Reported Net profit (mn) 3,644 2,765 2,842 3,120 3,454 Net profit growth 24.0% -24.1% 2.8% 9.8% 10.7% EPS (HK$) 2.348 1.781 1.831 2.010 2.224 Book value per share (HK$) 21.12 20.24 22.17 23.26 24.44 DPS (HK$) 0.497 0.694 0.798 0.915 1.044 Valuation (Nov) 2014A 2015A 2016E 2017E 2018E Price to book value 2.46x 2.57x 2.34x 2.23x 2.12x PER 21.91x 28.89x 28.10x 25.60x 23.12x Dividend Yield 0.97% 1.35% 1.55% 1.78% 2.03% P/EV 2.15x 2.09x 1.93x 1.73x 1.55x Implied new business multiplier 23.11x 18.93x 14.26x 10.57x 7.49x Katherine Hu >> Research Analyst Merrill Lynch (Hong Kong) +852 3508 2568 katherine.hu@baml.com Gigi Chen >> Research Analyst Merrill Lynch (Hong Kong) +852 3508 7152 gigi.chen@baml.com Stock Data Price 51.40 HKD Price Objective 58.00 HKD Date Established 24-Apr-2015 Investment Opinion C-1-7 52-Week Range 36.85 HKD-54.15 HKD Mrkt Val / Shares Out (mn) 76,130 USD / 12,048.0 Market Value (mn) 590,352 HKD Average Daily Value (mn) 122.54 USD Free Float 100.0% BofAML Ticker / Exchange AAIGF / HKG Bloomberg / Reuters 1299 HK / 1299.HK ROE (2016E) 8.7% Net Dbt to Eqty (Nov-2015A) NA Based on our calculation, even excluding the rush order effect in HK from mainland visitors, we estimate AIA’s VNB still grows around 21-24% on AER basis, which we consider as strong. We maintain our Buy rating on AIA shares. Timestamp: 28 October 2016 03:33PM EDTUnauthorized redistribution of this report is prohibited. This report is intended for ivandu@fuhhwa.com.hk 2 AIA Group Limited | 29 October 2016 iQprofile SM AIA Group Limited Company Sector Insurance - Life Company Description AIA is the leading insurer in Asia Pacific that traces its roots in the region back more than 90 years. The company is the largest insurer in its key operating markets such as Hong Kong, Singapore and Thailand. AIA is one of