高盛AIA上市IPO报告

December2,2010ACTIONBuyAIAGroup(1299.HK)ReturnPotential:17%EquityResearchUniquepan-Asiaexposure,VONBgrowth/marginsupturn;initiationSourceofopportunityWeinitiateonAIAwithaBuyratingand12-monthtargetpriceofHK$26.75,implying17%potentialupside.WeseeAIAasanarguably/heretoforeunder-managedbutuniquepan-Asialifeinsurerwithgoodrevitalizationprospects,ledbyanewCEOwithaprovendecades-longtrackrecordatPruAsia/globally.Whilethisturnaroundmaytaketimegivenitssize/presencein15Asianmarkets,weexpect15%valueofnewbusiness(VONB)CAGRthrough2013EandalifttonewbusinessmarginsandimpliedmultiplesasAIAre-hires/re-builds,cross-sellshigher-marginA&Hincoremarkets,andbettercapturesgrowthinnewmarkets,e.g.China,Indonesia,Philippines,Vietnam.CatalystAIAhasasolidbackbook(valueinforce—VIF)thatshouldgenerateaboutUS$2.2bnofcashearnings/yearoverthenextfiveyearsandunderpinits2011E15.9Xprice/cashearnings.Theupsidehingesonfrontbook(VONB)whichatUS$617mn(12mthroughMay2010)islowvs.itspast(US$960mnin2008)anditsownbackbook(4.4%ofVIF,versusPruAsia/PingAnat15.6%/25.5%),allreflectingAIA’spastasanarguablyunder-managedentitybesetbyAIGeventsof2005/2008/2010.WeseeVONBbacktoUS$947mnby2013E;ifAIAweretogetthereayearfasterasitrebuildsitsagencyforceandraisesitsmixofhigher-marginproducts,e.g.A&H,andsalesinChina,othernew/high-growthmarkets,wemayseetheimpliedvaluationmovingclosertoHK$29.ValuationOur12-mTPofHK$26.75isbasedon20.9X2011EVONB,usingourCamelot3-stagediscountmodel.Stillattractivelyvaluedat1.36X2011EEV(12.3XimpliedNBM),andwithsimilarVONBCAGRasChinaLife(15%vs.14%through2012E),vs.Chinainsurersat2.23X2011EEV(18.7XimpliedNBM).Keyrisks1)QE2/fallingbondyields,2)ContinuedVONBmarginpressures,weakVONBprogression,3)FurthermarketshareerosioninHK,Singapore,Thailand.INVESTMENTLISTMEMBERSHIPAsiaPacificBuyListCoverageView:[e-mail](Asia)L.L.C.TheGoldmanSachsGroup,Inc.doesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcertification,seetheendofthetext.OtherimportantdisclosuresfollowtheRegACcertification,[e-mail](Asia)L.L.C.PhilippaRogers,CFA+81(3)[e-mail].,Ltd.MelissaKuang,[e-mail](Singapore)PteTheGoldmanSachsGroup,Inc.GlobalInvestmentResearchGrowthReturns*MultipleVolatilityVolatilityMultipleReturns*GrowthInvestmentProfileLowHighPercentile20th40th60th80th100th*Returns=ReturnonCapitalForacompletedescriptionoftheinvestmentprofilemeasurespleaserefertothedisclosuresectionofthisdocument.AIAGroup(1299.HK)AsiaPacificInsurancePeerGroupAverageKeydataCurrentPrice(HK$)22.9012monthpricetarget(HK$)26.75Marketcap(HK$mn/US$mn)275,807.6/35,516.4Foreignownership(%)32.911/0911/10E11/11E11/12EEPS($)0.150.160.180.22EPSgrowth(%)329.110.114.719.9P/B(X)2.42.01.81.6P/E(X)20.218.416.013.3P/EVPS(X)NM1.51.41.2Dividendyield(%)0.10.00.81.0EVPSgrowth(%)--9.211.611.0ROEV(%)NM8.89.19.8ROA(%)2.22.02.02.0ROE(%)14.712.012.113.0Priceperformancechart22.022.523.023.524.024.525.0Sep-10Oct-10Nov-109,50010,00010,50011,00011,50012,00012,500AIAGroup(L)MSCIHongKong(R)Sharepriceperformance(%)3month6month12monthAbsolute------Rel.toMSCIHongKong------Source:Companydata,GoldmanSachsResearchestimates,FactSet.Priceasof12/01/2010close.December2,2010AIAGroup(1299.HK)AIAGroup:[e-mail]@gs.comPhilippaRogers,[e-mail],[e-mail]estmentResearch2Profitmodel($mn)11/0911/10E11/11E11/12EBalancesheet($mn)11/0911/10E11/11E11/12ENetpremiumsearned(NEP)10,102.011,111.712,642.414,172.7Totalinvestmentassets72,708.085,331.098,792.0113,842.2Risk:Benefitsandclaims13,563.010,002.412,554.314,407.8Premiumsreceivable0.00.00.00.0Increaseinlifereserves--------Deferredpolicyacquistioncosts10,976.012,184.614,193.816,444.2Netcommissionsexpensed1,648.01,569.31,794.82,019.0Fixedassets326.0306.0312.2318.5SGA--------Separateaccount0.00.00.00.0Underwritingprofit0.00.00.00.0Others6,649.07,339.68,202.39,162.3Investmentincome8,843.04,215.15,897.97,204.1Totalassets90,659.0105,161.2121,500.3139,767.1Otherincome(6,432.0)(1,619.9)(2,965.7)(3,659.6)Unearnedpremiumreserves0.00.00.00.0Pretaxprofit2,411.02,595.12,932.23,544.5Policyholders'reserves63,255.071,391.983,163.796,349.4Taxandminorityinterest657.0660.6712.5883.8Separateaccount7,780.09,078.610,001.111,008.4Netprofit1,754.01,934.62,219.62,660.7Otherliabilities4,665.07,201.18,915.910,691.6Totalliabilities75,700.087,671.6102,080.7118,049.4Factorsdrivingearningsgrowth(%)11/0911/10E11/11E11/12ETotalequity14,959.017,489.619,419.621,717.7Netpremiumsearnedgrowth(1.8)10.013.812.1Investm