AIA has announced its 3Q26 new business value (NBV) data: for 9M26, NBV grew by 5% YoY to USD4,627mn (at constant exchange rates/CER, same below), with the 3Q26 NBV falling by 5% YoY to USD1,415mn, slowing from 10% growth in 1H26. This was primarily dragged down by high base effects in Chinese Hong Kong and the Chinese Mainland, while total NBV from other markets grew by 18% YoY. The Group NBV for September increased by over 25% YoY, and the company expects growth momentum to improve further in 4Q26 as high base effects fade. For 3Q26, annualized new premiums (ANP) dropped by 13% YoY to USD2,237mn, mainly weighed down by the Chinese Mainland; the NBV margin expanded by 5.3pp YoY to 63.5%, primarily benefiting from product and channel structure optimization in the Chinese Mainland. On the earnings front, the company reiterated its expectation of a 2023-2026 CAGR for operating profit after tax (OPAT) per share to exceed the previous target range of 9-11%. Maintain BUY on still-favorable liability-side growth prospects.
Chinese Hong Kong: Tax reports weigh on MCV business
For 3Q26, Chinese Hong Kong NBV dropped by 3% YoY (vs. +10% in 1H26), mainly due to a high base in 3Q25. The combined NBV for August-September grew by 20% YoY, recording growth across all customer segments and distribution channels. Local customer business sustained strong growth, continuing its 1H trend; Mainland Chinese Visitor (MCV) business likely declined in 3Q26, as tax issues regarding offshore insurance gains prompted some clients to adopt a wait-and-see approach, which, combined with the high base last year, pressured 3Q growth. We expect local business to maintain solid growth, whereas MCV business may remain under pressure due to reports surrounding tax on Chinese Hong Kong insurance gains. We project the 2026 Chinese Hong Kong NBV growth at 3%.
Earnings forecasts and valuation
Considering the company’s solid operations, we keep our 2026/2027/2028 EPS forecasts unchanged at USD0.74/0.84/0.95. We project the 2026 Group NBV growth at 6% YoY (CER) and operating profit per share growth at 13% YoY (CER). We maintain our target price at HKD88 based on book value and embedded value methods. Reiterate BUY.
Risks: lower NBV growth than we expect; sharp investment market volatility; slower channel transformation in major markets than we expect.