UBS: Cuts AIA (01299) target price by 2% to HK$100, maintains "Buy" rating.

UBS released a research report stating that it has cut AIA's (01299) target price by 2%, from HK$102 to HK$100, while maintaining a "Buy" rating. The bank lowered its 2026 new business value (VNB) growth forecast to 10% to reflect pressure from third-quarter results and macroeconomic conditions year-to-date in the second half. AIA's share price has fallen 3.4% over the past two weeks, underperforming the Hang Seng Index by 2.2 percentage points, likely affected by the global bond selloff and market expectations of weak third-quarter results. AIA will announce its third-quarter results on October 30. UBS expects the company's third-quarter new business value to decline 4% year-on-year at constant exchange rates, compared with 10% growth in the first half; at actual exchange rates, it is expected to fall 3% year-on-year, mainly due to year-on-year declines in Hong Kong, mainland China, and Thailand markets, driven by a high base in the same period last year. At the same time, the bank expects other business markets, such as Singapore, Malaysia, and other markets, to achieve double-digit growth. The bank expects group new business value to post a strong year-on-year rebound in the fourth quarter as the base effect fades. Overall, it forecasts 2026 new business value to grow 10% year-on-year at constant exchange rates. UBS expects the company's embedded value (EV) to grow 2% in the second half, driven by embedded value operating profit and the dividend payout ratio. The bank forecasts 2026 return on embedded value (RoEV) to reach 17%, a strong performance.