Goldman Sachs: Lowering target price for Friends to HK$83, expecting second quarter new business value to grow by 16% annually.

Goldman Sachs released a report estimating that the new business value of AIA Insurance in the second quarter will grow by 16% annually based on the substantial interest rate, higher than the 13% in the first quarter; the net free surplus for the first half of the year is expected to grow by 9% annually, an improvement from the 2% for the full year of 2024. The bank predicts that AIA will not engage in additional share buybacks in the 2025 fiscal year. Investors should pay attention to key factors driving the growth of new business value and free surplus, including substantial growth in the mainland and new regions; sales momentum in the Hong Kong market; drivers of net free surplus growth, including operational differences and capital efficiency improvements. The bank has made slight adjustments to AIA's profit forecasts for 2025 to 2027 to reflect the latest market trends, exchange rate fluctuations, and sales momentum, and has changed the valuation method from discounted cash flow model to price-earnings ratio valuation method. The bank has lowered the 12-month target price from 90 Hong Kong dollars to 83 Hong Kong dollars, maintaining a "buy" rating.