23 November 2023: Wealth Product Ideas

Trade Idea: Robust Growth in China’s Insurance Sector

AIA reported a record-setting Q3, ending 30 September 2023, with a 35% growth in the value of new business (VONB) to US$994 million. This resulted in a robust VONB margin of 51.2%, an increase from the first half of 2023.
The high VONB is attributed to the strength and diversity of AIA’s businesses, particularly in Mainland China, Hong Kong, ASEAN, and India. Mainland China contributed over 20% VONB growth in Q3, boosted by post-pandemic reopening and cross-border demand.
Bloomberg suggests that AIA’s new-business value might still approach their above-consensus expectation of a 40% increase for the full year, with the mainland-visitor segment driving Hong Kong’s performance in Q4.
The company has been authorized to upgrade its Shijiazhuang license to fully cover Hebei, indicating further expansion into China.
Despite a general slowdown among peers, AIA’s new-business value (NBV) growth is impressive. However, Chinese life insurance companies such as Ping An, CPIC, and PICC are also expected to lead in NBV growth.
Investors interested in the Chinese insurance sector might consider life insurers due to their expected sound recovery.

Note: Pricing provided is indicative only. For updated pricing, please contact us directly.

Payout Scenarios:

Investors receive corresponding interest payments every month and;

KO Early Redemption: Principal + KO returns (KO event occurs only when the closing price of all underlying securities is higher than the knock-out price)
Maturity Redemption: If no KO event occurs, the payout will be:
- If the final price of all underlying is higher than or equal to the strike price, investors will receive 100% cash return on their principal, along with the final interest.
- If the final price of one or more underlying is lower than the strike price, investors will receive 100% of their principal in the form of shares of the worst-performing stock and will also receive the final interest.