EARNINGS PREVIEWHONG KONG INSURANCE 10 AIA …pg.jrj.com.cn/acc/Res/HK_RES/STOCK/2014/4/3/f15a2b... · that AIA is in our Asia Interest Rate Sensitive Basket since mid-2013. ... CHANGE

PREPARED BY NON-US BROKER-DEALER(S): BNP PARIBAS SECURITIES (ASIA) LTD THIS MATERIAL HAS BEEN APPROVED FOR U.S DISTRIBUTION. ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES CAN BE FOUND AT APPENDIX ON PAGE 10

Expect a moderating 1Q result

n VONB growth likely to moderate to 15% y-y in 1Q FY14

AIA is due to report its 1Q new business results on 11 April. We

expect a moderation in VONB growth to 15% y-y (USD329m VONB),

mainly on 13% ANP growth and a 70bps VONB margin expansion.

n Temporary headwinds, offset by AIA’s diversified Asia footprint

Our VONB estimate is at the lower end of Bloomberg consensus. We

believe this is because we have factored in the temporary ban on

telemarketing in Korea, adverse impact of still weakening Asean

currencies and a fading effect of the rise in MediShield premium in

Singapore in FY13.

n Still high VONB growth in FY14E among Asia life insurers

We believe the 15% VONB growth we estimate for AIA in FY14 will

be among the highest for life insurers in Asia. We expect AIA Hong

Kong to focus more on margin than volume and AIA China to

continue to focus on regular premium protection policies, its third-

largest VONB growth contributor.

n Trading at 12x INBM vs the target 22x on our AV valuation

Our HKD48.57 TP for AIA is based on our actuarial appraisal

valuation. This gives a target implied NB multiple of 21.7x (vs the

current 12.1x INBM). We reiterate our BUY rating on the stock. Note

that AIA is in our Asia Interest Rate Sensitive Basket since mid-2013.

Result announcement: 11 April 2014

Key points to watch Impact/action

We expect USD329m VONB (excl. corp. pension) for 1Q FY14, or 15% VONB y-y growth.

We believe that we are at the lower end of consensus, as we have taken into account several potential headwinds for FY14. But AIA’s VONB growth this year should still be among the fastest across the Asia life sector.

We expect 13% ANP growth driven by Hong Kong, Singapore, Malaysia and China.

The 13% ANP growth would imply that the adverse impact from currency fluctuations and the Korea business was offset by AIA’s well diversified Asian footprint.

We expect 70bps VONB margin expansion y-y to 39.1% for 1Q FY14.

This would imply margin pickup in Thailand, Malaysia and HK/China.

Source: BNP Paribas estimates

3 APRIL 2014

EARNINGS PREVIEW 10HONG KONG / INSURANCE

AIA 1299 HK

BUY UNCHANGED

TARGET PRICE HKD48.57

CLOSE HKD38.10

UP/DOWNSIDE +27.5%

PRIOR TP HKD48.57

CHANGE IN TP UNCHANGED

HOW WE DIFFER FROM CONSENSUS MARKET RECS

TARGET PRICE (%) 12.6 POSITIVE 19

EPS 2014 (%) (7.1) NEUTRAL 1

EPS 2015 (%) (6.5) NEGATIVE 3

Dominic Chan, CFA [email protected]

+852 2825 1175

Frank Yuen, CFA [email protected]

+852 2825 1863

Our research is available on Thomson One, Bloomberg, TheMarkets.com, Factset and on http://eqresearch.bnpparibas.com/index. Please contact your salesperson for

authorisation. Please see the important notice on the back page.

KEY STOCK DATA

YE Nov (USD m) 2012A 2013E 2014E 2015E

OPAT 2,159 2,651 3,085 3,427

Net profit 3,018 2,655 3,150 3,505

Reported EPS (USD) 0.25 0.22 0.26 0.29

EPS growth (%) 89 (12) 19 11

EV growth (%) 15 8 14 13

VONB growth (%) 28 25 15 18

Dividend yield (%) 1.0 1.1 1.2 1.2

P/EV 1.8 1.7 1.5 1.3

ROE (%) 12.9 10.4 11.7 11.7

Share price performance 1 Month 3 Month 12 Month

Absolute (%) 2.7 (0.9) 10.8

Relative to country (%) 2.4 0.2 9.7

Next results April 2014

Mkt cap (USD m) 59,163

3m avg daily turnover (USD m) 117.0

Free float (%) 100

Major shareholder -

12m high/low (HKD) 40.05/31.65

3m historic vol. (%) 19.6

ADR ticker -

ADR closing price (USD) -

Issued shares (m) 12,044

Sources: Bloomberg consensus; BNP Paribas estimates

(3)

2

7

12

30

35

40

45Mar-13 Jun-13 Sep-13 Dec-13 Mar-14

(%)(HKD) AIA Rel to Hang Seng Index

http://equities.bnpparibas.com/

AIA 1299 HK Dominic Chan, CFA

2 BNP PARIBAS 3 APRIL 2014

Investment thesis

AIA is due to report its 1Q FY14 new business results on Friday, 11 April. Despite recent changes to our economic assumptions, we expect VONB growth in 1Q to moderate to 15% y-y resulting in USD329m VONB, mainly on 13% ANP growth and 70bps VONB margin expansion. We are at the lower end of consensus VONB. This is probably because we have factored in the temporary ban on telemarketing in Korea, adverse impact of continuing weakness in Asean currencies, and a fading effect of the rise in MediShield premium in Singapore in FY13.

Despite several temporary headwinds, our 15% VONB growth estimate for FY14 should be among the highest for Asia life insurers. We expect AIA China to remain focused on regular premium protection policies, such as “seven on one” A&H policies in FY14. After strong 29% ANP growth for AIA Hong Kong in FY13 (partly driven by pre-retiree savings products), we expect AIA to emphasise more on higher-margin protection products in FY14. The Citi bancassurance deal presents VONB upside potential for HK/SG/China from FY15, which is not in our estimates.

Catalyst

Given the new AIA Thailand CEO and agency compensation structure changes in Thailand in FY13, we expect its agents to be keener than earlier to sell higher-margin products in FY14. AIA Malaysia should see ongoing improvement in the product mix from full integration of ING Malaysia, a strong bancassurance partnership with Public Bank, and the recent AIA Public Takaful integration.

Risks to our call

Our HKD48.57 TP for AIA is based on our actuarial appraisal valuation. This gives a target implied NB multiple of 21.7x (vs the current 12.1x INBM). Trading at a 1.5x EV, we reiterate our BUY rating on AIA with 28% share price upside. Note that AIA is in our Asia Interest Rate Sensitive Basket since mid-2013, given the high interest rate sensitivity of its VONB vs the other regional insurers we cover. Risks to our BUY call are further Asean currency weakness and a potential credit risk to AIA’s Asean bond portfolio.

Company background Key assumptions

AIA is the largest independent publicly listed pan-Asian life

insurance group in the world. It has wholly-owned main

operating subsidiaries or branches in 14 markets in Asia Pacific

– Hong Kong, Thailand, Singapore, Malaysia, China, Korea,

etc. AIA mainly relies on agency and other profitable

partnerships such as banks for its distribution. It has over 24m

individual policies and over 10m group insurance

members.

ANP growth (%) FY13 FY14E FY15E

Hong Kong 29 18 15

Thailand 6 7 13

Singapore 18 16 18

Malaysia 111 18 20

China 16 18 19

Korea 43 (5) 15

Total ANP growth 24 11 16

Group VONB margin 44.1% 45.6% 46.6%

Source: BNP Paribas estimates

Principal activities (VONB mix, ’14E – BNP Paribas estimates) Earnings sensitivity

Worst Base Better

VONB margin FY14E (%) 44.6 45.6 46.6

ANP FY14E (USD m) 3,553 3,719 3,875

ANP growth (%) 6.0 11.0 16.0

VONB FY14E (USD m) 1,584 1,695 1,805

AAV per share (fair value) (HKD) 46.3 48.57 51.3

Key executives Source: BNP Paribas estimates

Age Since Title

Mark Tucker 55 2009 Group Chief Executive Officer

Garth Jones 51 2011 Group Chief Financial Officer

Gordon Watson 50 2011 Regional Chief Executive

Ng Kenh Hooi 58 2010 Regional Chief Executive

http://www.aia.com/en/

Ongoing sustainability of high VONB growth above peers

should continue to widen the valuation gap between AIA

and its regional peers.

AIA is also an ideal long bond yield play, as we estimate

its VONB rises 24% for each 100bp rise in the yield curve

(at the long end).

We believe our 22x target INBM for AIA remains

achievable, given the solid VONB growth momentum.

Hong Kong23%

Thailand17%

Singapore12%

Malaysia10%

China7%

Korea10%

Other markets21%

http://www.aia.com/en/



We expect 15% VONB growth y-y for 1Q FY14

AIA is due report its 1Q FY14 new business results on Friday, 11 April 2014. Despite

recent changes to our economic assumptions (RDR down by about 25bps for a

number of key geographies), we expect VONB growth to moderate to 15% y-y

(excluding corporate pension) leading to VONB of USD329m for 1Q, mainly driven

by 13% ANP growth and 70bps VONB margin expansion (Exhibits 1 and 2). We are

at the lower end of consensus VONB. This is probably because we have factored in

the temporary ban on telemarketing in Korea, adverse impact of continuing

weakness in Asean currencies, and a fading effect on rising MediShield premium in

Singapore in FY13.

EXHIBIT 1: AIA VONB and ANP trend (quarterly) EXHIBIT 2: AIA VONB margin trend

Sources: AIA; BNP Paribas estimates Sources: AIA; BNP Paribas estimates

Temporary hiccup in Korea telemarketing

The telemarketing ban in Korea resulted from the theft of data on 20m customers

from three Korean credit card companies, the largest personal information leak in

Korea’s history. The Financial Services Commission (FSC) prohibited telemarketing

by financial firms until the end of March 2014 to prevent any potential misuse of the

stolen customer data. As AIA’s telemarketers are paid a sales commission, their

incomes were severely affected. Thus, AIA was forced to come up with a retention

package for them. About 35% of AIA Korea’s total new contracts are sold through

telemarketing, and these represent the highest-margin business for the company in

Korea. As a result, we expect VONB in Korea to have declined 10% to USD82m, or

4% of total group VONB for FY14E (vs 6% in 2013) (Exhibit 3).

EXHIBIT 3: AIA VONB trend by geography

-------------------------------- VONB --------------------------------

---------------------------------- Growth -----------------------------------------

FY11 FY12 FY13 FY14E FY15E


(YE November) (USD m) (USD m) (USD m) (USD m) (USD m)

(%) (%) (%) (%) (%)

VONB (excl. corp. pension):

Hong Kong 293 353 449 537 618

45 20 27 19 15

Thailand 227 286 318 350 399

31 26 11 10 14

Singapore 164 226 269 308 365

58 38 19 15 18

Malaysia 58 68 121 146 178

49 17 78 20 22

China 102 124 166 199 238

49 22 34 20 20

Korea 74 68 91 82 100

15 (8) 34 (10) 22

Other markets 112 162 221 247 287

13 45 36 12 16

Total VONB (excl. corp. pen.) 920 1,174.0 1,472 1,695.2 2,000.1 39 28 25 15 18

Source: AIA; BNP Paribas estimates

0

200

400

600

800

1,000

1,200

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14E

2Q14E

3Q14E

4Q13E

(USD m) VONB ANP

25

30

35

40

45

50

55

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14E

2Q14E

3Q14E

4Q13E

(%)



Currency impact from several Asean countries

AIA has a November year end, and its 1Q results pertain to the period between

December 2013 and February 2014. We note that adverse currency rates continued

to be a drag on AIA’s ANP and, hence, also VONB growth in USD terms in 1Q FY14.

In particular, the Indonesia rupiah, Australia dollar and Philippines peso depreciated

significantly by 9-20% y-y in 1Q CY14, though the decline has narrowed to 8-15% in

2Q YTD (Exhibits 4 and 5).

We believe that this will reduce VONB growth for AIA’s “Other markets” (ie, Australia,

Philippines and Indonesia) to the low teens in FY14 from 36% in FY13, though we

expect the decrease in the ANP growth rate to 7% in FY14 to be partially offset by an

ongoing 140bps margin expansion in the Other markets (Exhibit 4).

EXHIBIT 4: AIA ANP and VONB margin trend by geography

---------------------------------- Growth -----------------------------------------



(YE November) (USD m) (USD m) (USD m) (USD m) (USD m) (%) (%) (%) (%) (%)

ANP (excl. corp. pension):

Hong Kong 522 604 781 922 1,060

16 16 29 18 15

Thailand 465 532 565 605 683

11 14 6 7 13

Singapore 264 339 400 464 548

26 28 18 16 18

Malaysia 142 151 319 376 452

21 6 111 18 20

China 215 215 249 294 350

4 0 16 18 19

Korea 270 237 338 321 369

(4) (12) 43 (5) 15

Other markets 594 618 689 737 833

74 4 11 7 13

Total ANP 2,472 2,696 3,341 3,719 4,295 22 9 24 11 16

VONB margin (%)

Hong Kong 56.1 58.4 57.5 58.2 58.4

24 4 (2) 1 0

Thailand 48.8 53.8 56.3 58.0 58.4

18 10 5 3 1

Singapore 62.1 66.7 67.3 66.4 66.5

26 7 1 (1) 0

Malaysia 40.8 45.0 37.9 38.7 39.5

23 10 (16) 2 2

China 47.4 57.7 66.7 67.6 68.0

43 22 16 1 1

Korea 27.4 28.7 26.9 25.5 27.0

20 5 (6) (5) 6

Other markets 18.9 26.2 32.1 33.5 34.4

(35) 39 22 5 3

Total VONB Margin 37.2 43.5 44.1 45.6 46.6 14 17 1 3 2

Sources: AIA; BNP Paribas estimates

EXHIBIT 5: Key Asian currencies against the USD

Source: Datastream

(25)

(20)

(15)

(10)

(5)

0

5

10

M. Ringgit T. Baht K. Won I. Rupiah P. PESO SGD RMB AUD

(%) 3Q13 4Q13 1Q14



Volume growth focus in AIA Singapore in 2014

Although the Singapore dollar depreciated only 3% against the USD in 1Q CY14

(Exhibit 5), we expect the favourable effect of enhancements to MediShield in

Singapore (effective 1 March 2013) to start to fade out from 1 March 2014.

MediShield is an affordable basic medical insurance scheme that helps

Singaporeans bear large hospitalisation costs at Class B2 or C wards. MediShield

can be paid for in cash or through Medisave. Medisave-approved private Integrated

Shield Plans can be purchased for Class B1 or higher wards from one of the five

approved integrated shield plan providers, including AIA, Great Eastern, NTUC,

Aviva and Pru (Exhibits 6 and 7).

There were various enhancements to MediShield on 1 March 2013, including raising

of the coverage age to 90 years from 85, extending coverage to in-patient congenital

and neonatal treatment for newly diagnosed conditions, extending coverage to short-

stay wards in emergency departments, etc.

Policyholders aged 65 years and below now face an annual premium increase of 37-

100% depending on the age group, though the absolute premium increase is just

SGD1-10 per month. The five private plan providers have also increased annual

premiums 20-50% for shield plans, in line with the MediShield premium increases for

2013, as well as rising medical costs and claims experience.

In FY14, we believe that AIA will focus on higher volume growth than margin, given

the fading effect of the premium hike for high-margin Integrated Shield plans. We

expect AIA Singapore’s VONB margin to moderate 90bps to 66.4%, with 16% ANP

growth, resulting in 15% VONB growth in FY14.

EXHIBIT 6: SG non-linked other premium market share, 2012 EXHIBIT 7: AIA Singapore premium and mix trend

Source: MAS Source: MAS

Still one of the highest VONB growth among life insurers in Asia

Despite the several headwinds mentioned above, we believe that the 15% VONB

growth we estimate for AIA will be among the highest for life insurers in Asia (Exhibit

8). In FY14, we expect AIA China to remain focused on regular premium long-term

protection policies, such as “seven on one” accident and health protection policies

with accelerating benefit features, sold by its tied agency channel to the mass

affluent. The recent increase in the ceiling on the interest credited to policyholders to

3.5% from 2.5% should have a minimal impact on investment margin, as AIA focuses

mainly on protection and not bancassurance saving products. We expect AIA China

to generate 20% VONB growth, mainly driven by 18-19% ANP growth, with VONB

margin rising to 67-68% for FY14-15 (Exhibits 3 and 4). The mix of AIA China VONB

will likely increase 1ppt to 11% of the total group VONB in FY14.

After strong 29% ANP growth for AIA Hong Kong in FY13 (partly driven by pre-retiree

savings products), we expect AIA to emphasise more on higher-margin protection

products in FY14, and we expect 19% and 15% VONB growth for Hong Kong in

FY14 and FY15 (Exhibits 3 and 4). We have not factored in any major VONB

AIA22%

Great Eastern Life24%

NTUC Income16%

Prudential19%

AVIVA8%

Others5%

Manulife4%

HSBC Insurance2%

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2005 2006 2007 2008 2009 2010 2011 2012

(SGD) Non-linked single prem

Linked single prem

Non-linked other prem

Linked other prem



contribution from the newly executed exclusive bancassurance partnership with Citi,

as the two companies are likely to still be in a phase of scaling up joint operations

and co-operation during this period.

Although AIA Thailand VONB is likely to be dragged down by Thai baht depreciation

(down 8% y-y in 1Q CY14) and the ongoing political unrest, the impact of this should

be offset by performance of the new AIA Thailand CEO (who joined in mid-2013), as

well as changes to the agency compensation structure in 2013. Given the

compensation structure changes, we believe agents will be keener than earlier to sell

higher-margin products. Hence, we estimate a 170bps rise in VONB margin to 58%

in FY14, though ANP growth should still be in mid-single digits, resulting in 10%

VONB growth for FY14.

We expect 20% and 22% VONB growth for AIA Malaysia in FY14/FY15, driven by a

rising VONB margin of close to 40% by FY15 (vs 45% prior to the acquisition of ING

Malaysia) with an improving product mix. The low-margin products have been

replaced by regular savings and protection products, such as unit-linked plans with

riders. We believe AIA has a strong bancassurance partnership with Public Bank

(arising from the ING acquisition), with bancassurance contributing about 18% of

total VONB in AIA Malaysia. The AIA Public Takaful integration was completed in

March 2014, pointing to further VONB momentum from Takaful sales.

EXHIBIT 8: APAC life insurers valuation comparison (P/EV vs VONB growth)

Note: All companies are under BNP Paribas coverage except Prudential (PRU LN) and Bangkok Life (BLA TB) Sources: Bloomberg; BNP Paribas estimates

Our HKD48.57 target price for AIA is based on our actuarial appraisal valuation. This

gives a target implied NB multiple of 21.7x (vs the current 12.1x INBM). Trading at a

1.5x EV, we reiterate our BUY rating on AIA with 28% share price upside (Exhibits 9

and 10). Note that AIA is in our Asia Interest Rate Sensitive Basket since mid-2013,

given the high interest rate sensitivity of its VONB compared to the other regional

insurers in our coverage universe. With a further uptrend in the long-term interest

rate on the back of the US tapering, we also see AIA as an ideal play on the rate hike

theme. The risks to our BUY call are further Asean currency weakness and a

potential credit risk to AIA’s Asean bond portfolio.

AIA

Samsung Life

Hanwha Life

LIG

Samsung F&MDongbu

Hyundai M&F

China Life Ping An CPIC

NCL

Cathay FHC

China Life TW

GE

Bangkok Life

Prudential

Fubon FHC

0.0

0.5

1.0

1.5

2.0

2.5

3.0

(5) 0 5 10 15 20 25

P/EV (x)

VONB (y-y %)



EXHIBIT 9: AIA P/EV band EXHIBIT 10: AIA VONB multiple vs VONB growth

Sources: Bloomberg; BNP Paribas Sources: Bloomberg; BNP Paribas

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1.7

Apr-12 Jul-12 Oct-12 Jan-13Apr-13 Jul-13 Oct-13 Jan-14Apr-14

(x)

Mean

+1 S.D

+2 S.D

-1 S.D

-2 S.D

0

5

10

15

20

25

30

35

40

45

50

0

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4

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Nov 10

Jan 11

Mar 11

May 11

Jul 11

Sep 11

Nov 11

Jan 12

Mar 12

May 12

Jul 12

Sep 12

Nov 12

Jan 13

Mar 13

May 13

Jul 13

Sep 13

Nov 13

Jan 14

Mar 14

(y-y %)(x) VNB multiple (LHS) VONB growth (RHS)



Financial statements AIA

Profit and Loss (USD m) Year Ending Nov 2011A 2012A 2013E 2014E 2015E

Gross premium and fee 12,935 13,816 15,980 17,924 20,175

Reinsurance (634) (762) (551) (840) (1,140)

Net premium earned 12,301 13,054 15,429 17,084 19,035

Claims and benefits (9,072) (13,374) (14,409) (16,203) (18,061)

Policy acquisition cost (1,649) (1,641) (1,908) (2,127) (2,385)

Securities trading income 0 0 0 0 0

G&A cost (1,265) (1,359) (1,637) (1,822) (2,057)

Other income 0 0 0 0 0

Other provisions 0 0 0 0 0

Underwriting profit 315 (3,320) (2,526) (3,068) (3,468)

Interest and dividend income 0 0 0 0 0

Capital gains/(losses) 1,777 6,971 5,863 6,967 7,871

Dividend and interest to policyholders 0 0 0 0 0

Net investment income 1,777 6,971 5,863 6,967 7,871

Other income 114 127 140 154 169

Other operating costs 0 0 0 0 0

Operating profit 2,206 3,778 3,477 4,053 4,572

Recurring non operating income 12 16 21 19 20

Associates 12 16 21 19 20

Goodwill amortization 0 0 0 0 0

Non recurring items (50) (80) (88) (97) (106)

Profit before tax 2,168 3,714 3,410 3,976 4,486

Tax (560) (685) (742) (812) (966)

Profit after tax 1,608 3,029 2,667 3,163 3,520

Minority interests (8) (11) (12) (13) (15)

Preferred dividends 0 0 0 0 0

Other items 0 0 0 0 0

Reported net profit 1,600 3,018 2,655 3,150 3,505

Non recurring items & goodwill (net) 50 80 88 97 106

Recurring net profit 1,650 3,098 2,743 3,247 3,612

Supplementary items

Embedded value 27,239 31,408 33,822 38,381 43,570

One year's new business value 920 1,174 1,451 1,695 2,000

Per share (USD)

Recurring EPS * 0.14 0.26 0.23 0.27 0.30

Reported EPS 0.13 0.25 0.22 0.26 0.29

DPS 0.04 0.05 0.06 0.06 0.06

Embedded value per share 2 3 3 3 4

Growth

Net premium earned (%) 11.0 6.1 18.2 10.7 11.4

Underwriting profit (%) (108.8) (1,154.0) (23.9) 21.5 13.0

Operating profit (%) (38.7) 71.3 (8.0) 16.6 12.8

Reported net profit (%) (40.8) 88.6 (12.0) 18.6 11.3

Recurring EPS (%) (39.8) 87.8 (11.4) 18.3 11.2

Reported EPS (%) (40.8) 88.6 (12.0) 18.6 11.3

Income breakdown

Net premium earned (%) 86.7 64.8 72.0 70.6 70.3

Net investment income (%) 12.5 34.6 27.4 28.8 29.1

Other income (%) 0.8 0.6 0.7 0.6 0.6

Operating performance

Underwriting margin (%) 2.6 (25.4) (16.4) (18.0) (18.2)

Operating margin (%) 17.93 28.94 22.54 23.72 24.02

Investment yield (%) 2.16 7.00 5.05 5.30 5.31

Effective tax rate (%) 25.8 18.4 21.8 20.4 21.5

Dividend payout on recurring profit (%) 30.8 18.5 25.2 21.3 19.9

ROE (%) 8.1 12.9 10.4 11.7 11.7

ROE - COE (%) - - - - -

ROA (%) 1.49 2.50 1.91 2.02 2.02

Cash & equivalents 65.8 (31.5) (24.3) 5.0 5.0

Bank deposits - - - - -

Debt securities 9.9 20.4 11.8 10.5 11.1

Equity securities (13.5) 23.1 19.1 17.5 17.9

* Pre exceptional, pre-goodwill and fully diluted




Financial statements AIA

Balance Sheet (USD m) Year Ending Nov 2011A 2012A 2013E 2014E 2015E

Cash & equivalents 4,303 2,948 2,230 2,342 2,459

Bank deposits 0 0 0 0 0

Debt securities 72,517 87,287 97,569 107,832 119,788

Equity securities 19,737 24,294 28,926 33,985 40,055

Investment properties 896 1,035 1,087 1,141 1,198

Other financial assets 0 0 0 0 0

Total investments 97,453 115,564 129,812 145,300 163,500

Tangible fixed assets 359 412 461 680 758

Associates 61 91 96 100 105

Deferred acquisition cost 12,818 14,161 16,198 17,655 19,267

Goodwill 0 0 0 0 0

Other intangible assets 276 272 1,367 1,495 1,649

Other assets 3,494 3,939 5,630 4,704 4,213

Total assets 114,461 134,439 153,563 169,934 189,492

Insurance reserve 78,752 90,574 105,500 120,640 137,716

Policyholders' deposits 8,360 8,865 10,043 11,253 12,677

Unearned premium reserve 0 0 0 0 0

Other reserves 0 0 0 0 0

Total insurance liabilities 87,112 99,439 115,543 131,893 150,393

Hybrid capital 0 0 0 0 0

Other liabilities 5,934 8,172 11,563 8,635 6,294

Total liabilities 93,046 107,611 127,106 140,528 156,687

Share capital 12,044 12,044 12,044 12,044 12,044

Reserves 9,269 14,653 14,270 17,205 20,591

Total equity 21,313 26,697 26,314 29,249 32,635

Minority interests 102 131 143 156 171

Total liabilities & equity 114,461 134,439 153,563 169,934 189,492

Per share (USD)

Book value per share 1.77 2.22 2.18 2.43 2.71

Tangible book value per share 0.68 1.02 0.73 0.84 0.97

Growth

Total investments (%) 5.7 18.6 12.3 11.9 12.5

Total assets (%) 6.1 17.5 14.2 10.7 11.5

Total insurance liabilities (%) 5.9 14.2 16.2 14.2 14.0

Book value per share (%) 9.0 25.3 (1.4) 11.2 11.6

Levarage & capital measures

Equity/assets (%) 18.6 19.9 17.1 17.2 17.2

Tangible equity/assets (%) 7.2 9.1 5.7 5.9 6.2

Solvency margin ratio (%) 310.9 353.2 335.3 354.7 372.4

Valuation 2011A 2012A 2013E 2014E 2015E

Recurring P/E (x) * 35.9 19.1 21.6 18.2 16.4

Reported P/E (x) 37.0 19.6 22.3 18.8 16.9

Dividend yield (%) 0.9 1.0 1.2 1.2 1.2

Price/book (x) 2.8 2.2 2.2 2.0 1.8

Price/tangible book (x) 7.2 4.8 6.8 5.9 5.0

Price/tangible book @ target price (x) 9.2 6.1 8.6 7.5 6.4

Price/embedded value (x) 2.2 1.9 1.7 1.5 1.4

Price/embedded value @ target price (x) 2.8 2.4 2.2 2.0 1.7

* Pre exceptional, pre-goodwill and fully diluted




Disclaimers and Disclosures

APPENDIX

DISCLAIMERS AND DISCLOSURES APPLICABLE TO NON-US BROKER-DEALER(S) (BNP Paribas Securities (Asia) Ltd)

ANALYST(S) CERTIFICATION

Dominic Chan, CFA, BNP Paribas Securities (Asia) Ltd, +852 2825 1175, [email protected].

Frank Yuen, CFA, BNP Paribas Securities (Asia) Ltd, +852 2825 1863, [email protected].

The analyst(s) or strategist(s) herein each referred to as analyst(s) named in this report certify(ies) that (i) all views expressed in this report accurately reflect the personal view of the analyst(s) with regard to any and all of the subject securities, companies or issuers mentioned in this report; and (ii) no part of the compensation of the analyst(s) was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the research analyst herein. Analysts mentioned in this disclaimer are employed by a non-US affiliate of BNP Paribas Securities Corp., and are not registered/ qualified pursuant to NYSE and/or FINRA regulations.

IMPORTANT DISCLOSURES REQUIRED IN THE UNITED STATES BY FINRA RULES AND OTHER JURISDICTIONS "BNP Paribas” is the marketing name for the global banking and markets business of BNP Paribas Group. No portion of this report was prepared by BNP Paribas Securities Corp (US) personnel, and it is considered Third-Party Affiliate research under NASD Rule 2711. The following disclosures relate to relationships between companies covered in this research report and the BNP entity identified on the cover of this report, BNP Securities Corp., and other entities within the BNP Paribas Group (collectively, "BNP Paribas").

The disclosure column in the following table lists the important disclosures applicable to each company that has been rated and/or recommended in this report:

Company Ticker Disclosure (as applicable)

AIA 1299 HK 6

BNP Paribas represents that: 1. Within the past year, it has managed or co-managed a public offering for this company, for which it received fees. 2. It had an investment banking relationship with this company in the last 12 months. 3. It received compensation for investment banking services from this company in the last 12 months. 4. It expects to receive or intends to seek compensation for investment banking services from the subject company/ies in the next 3 months. 5. It beneficially owns 1% or more of any class of common equity securities of the subject company. 6. It makes a market in securities in respect of this company. 7. The analyst(s) or an individual who assisted in the preparation of this report (or a member of his/her household) has a financial interest position in

securities issued by this company. The financial interest is in the common stock of the subject company, unless otherwise noted. 8. The analyst (or a member of his/her household) is an officer, director, or advisory board member of this company or has received compensation from the

company.

IMPORTANT DISCLOSURES REQUIRED IN KOREA The disclosure column in the following table lists the important disclosures applicable to each Korea listed company that has been rated and/or recommended in this report:

Company Ticker Price (as of 03-Apr-2014 closing price) Interest

N/A N/A N/A N/A

1. The performance of obligations of the Company is directly or indirectly guaranteed by BNP Paribas Securities Korea Co. Ltd (“BNPPSK”) by means of payment guarantees, endorsements, and provision of collaterals and/or taking over the obligations.

2. BNPPSK owns 1/100 or more of the total outstanding shares issued by the Company. 3. The Company is an affiliate of BNPPSK as prescribed by Item 3, Article 2 of the Monopoly Regulation and Fair Trade Act. 4. BNPPSK is the financial advisory agent of the Company for the Merger and Acquisition transaction or of the Target Company whereby the size of the

transaction does not exceed 5/100 of the total asset of the Company or the total number of outstanding shares. 5. BNPPSK has taken financial advisory service regarding listing to the Company within the past 1 year. 6. With regards to the tender offer initiated by the Company based on Item 2, Article 133 of the Financial Investment Services and Capital Market Act,

BNPPSK acts in the capacity of the agent for the tender offer designated either by the Company or by the target company, provided that this provision shall apply only where tender offer has not expired.

7. the listed company which issued the stocks in question in case where 40 days has not passed since the new shares were listed from the date of entering into arrangement for public offering or underwriting-related agreement for issuance of stocks

8. The Company is recognized as having considerable interests with BNPPSK. 9. The analyst or his/her spouse owns (including delivery claims of marketable securities based on legal regulations and trading and misc. contracts) the

following securities or rights (hereinafter referred to as “Securities, etc.” in this Article) regardless of whose name is used in the trading. 1) Stocks, bond with stock certificate, and certificate of pre-emptive rights issued by the Company whose securities dealings are being solicited. 2) Stock options of the Company whose securities dealings are being solicited. 3) Individual stock future, stock option, and warrants that use the stocks specified in Item 1) as underlying.



History of change in investment rating and/or target price

AIA (1299 HK)

Dominic Chan started covering this stock from 28-Aug-2012 Price and TP are in local currency Valuation and risks: The key risks to our actuarial appraisal valuation based target price are further Asean currency weakness and a potential credit risk to AIA’s Asean bond portfolio. Sources: Bloomberg; BNP Paribas

GENERAL DISCLAIMER This report was produced by BNP Paribas Securities (Asia) Ltd, member company(ies) of the BNP Paribas Group. This report is for the use of intended recipients only and may not be reproduced (in whole or in part) or delivered or transmitted to any other person without our prior written consent. By accepting this report, the recipient agrees to be bound by the terms and limitations set forth herein. This report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Customers are advised to use the information contained herein as just one of many inputs and considerations prior to engaging in any trading activity. This report does not constitute a prospectus or other offering document or an offer or solicitation to buy or sell any securities or other investments. This report is not intended to provide the sole basis of any evaluation of the subject securities and companies mentioned in this report. Information and opinions contained in this report are published for reference of the recipients and are not to be relied upon as authoritative or without the recipient’s own independent verification, or taken in substitution for the exercise of judgment by the recipient. Additionally, the products mentioned in this report may not be available for sale in certain jurisdictions. As an investment bank with a wide range of activities, BNP Paribas may face conflicts of interest, which are resolved under applicable legal provisions and internal guidelines. You should be aware, however, that BNP Paribas may engage in transactions in a manner inconsistent with the views expressed in this document, either for its own account or for the account of its clients.

Australia: This report is being distributed in Australia by BNP Paribas Sydney Branch, registered in Australia as ABN 23 000 000 117 at 60 Castlereagh Street Sydney NSW 2000. BNP Paribas Sydney Branch is licensed under the Banking Act 1959 and the holder of Australian Financial Services Licence no. 238043 and therefore subject to regulation by the Australian Securities & Investments Commission in relation to delivery of financial services. By accepting this document you agree to be bound by the foregoing limitations, and acknowledge that information and opinions in this document relate to financial products or financial services which are delivered solely to wholesale clients (in terms of the Corporations Act 2001, sections 761G and 761GA; Corporations Regulations 2001, division 2, reg. 7.1.18 & 7.1.19) and/or professional investors (as defined in section 9 of the Corporations Act 2001).

Canada: The information contained herein is not, and under no circumstances is to be construed as, a prospectus, an advertisement, a public offering, an offer to sell securities described herein, or solicitation of an offer to buy securities described herein, in Canada or any province or territory thereof. Any offer or sale of the securities described herein in Canada will be made only under an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only by a dealer properly registered under applicable securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement in the relevant province or territory of Canada in which such offer or sale is made. The information contained herein is under no circumstances to be construed as investment advice in any province or territory of Canada and is not tailored to the needs of the recipient. To the extent that the information contained herein references securities of an issuer incorporated, formed or created under the laws of Canada or a province or territory of Canada, any trades in such securities must be conducted through a dealer registered in Canada. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed judgment upon these materials, the information contained herein or the merits of the securities described herein, and any representation to the contrary is an offence.

Hong Kong: This report is prepared for professional investors and is being distributed in Hong Kong by BNP Paribas Securities (Asia) Limited to persons whose business involves the acquisition, disposal or holding of securities, whether as principal or agent. BNP Paribas Securities (Asia) Limited, a subsidiary of BNP Paribas, is regulated by the Securities and Futures Commission for the conduct of dealing in securities, advising on securities, providing automated trading services, dealing in futures contacts and advising on corporate finance. For professional investors in Hong Kong, please contact BNP Paribas Securities (Asia) Limited for all matters and queries relating to this report.

India: In India, this document is being distributed by BNP Paribas Securities India Pvt. Ltd. ("BNPPSIPL"), having its registered office at 5th floor, BNP Paribas House, 1 North Avenue, Maker Maxity, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 (Tel. no. +91 22 3370 4000 / 6196 4000). BNPPSIPL is registered with the Securities and Exchange Board of India (“SEBI”) as a stockbroker in the Equities and the Futures & Options segments of National Stock Exchange of India Ltd. and Bombay Stock Exchange Ltd. (SEBI regn. nos. INB/INF231474835, INB/INF011474831).

Indonesia: This report is being distributed by PT BNP Paribas Securities Indonesia and is delivered by licensed employee(s) to its clients. PT BNP Paribas Securities Indonesia, having its registered office at Menara BCA, 35th Floor, Grand Indonesia, Jl. M.H.Thamrin No.1, Jakarta, 10310, Indonesia, is a fully subsidiaries company of BNP Paribas SA and is licensed under Capital Market Law No. 8 of 1995 and the holder of broker-dealer and underwriter licenses issued by the Capital Market and Financial Institutions Supervisory Agency (BAPEPAM-LK). PT BNP Paribas Securities Indonesia is also a member of Indonesia Stock Exchange. Neither this research publication nor any copy hereof may be distributed in Indonesia or to any Indonesian citizens except in compliance with applicable Indonesian capital market laws and regulations. This research publication is not an offer of securities in Indonesia. Some of the securities referred to in this research publication have not been registered with the Capital Market and Financial Institutions Supervisory Agency (BAPEPAM-LK) pursuant to relevant capital market laws and regulations, and may not be offered or sold within the territory of the Republic of Indonesia or to Indonesian citizens through a public offering or in circumstance which constitute an offer within the meaning of Indonesian capital market laws and regulations.

Japan: This report is being distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited or by a subsidiary or affiliate of BNP Paribas not registered as a financial instruments firm in Japan, to certain financial institutions defined by article 17-3, item 1 of the Financial Instruments and Exchange Law Enforcement Order. BNP Paribas Securities (Japan) Limited is a financial instruments firm registered according to the Financial Instruments and Exchange Law of Japan and a member of the Japan Securities Dealers Association, the Financial Futures Association of Japan and the Type II Financial

Date Reco TP

2-Apr-11 Not Rated

28-Aug-12 BUY 38.47

17.94

22.94

27.94

32.94

37.94

42.94

47.94

52.94

Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14

(HKD) AIA Target Price



Instruments Firms Association. BNP Paribas Securities (Japan) Limited accepts responsibility for the content of a report prepared by another non-Japan affiliate only when distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited. Some of the foreign securities stated on this report are not disclosed according to the Financial Instruments and Exchange Law of Japan.

Malaysia: This report is issued and distributed by BNP Paribas Capital (Malaysia) Sdn Bhd. The views and opinions in this research report are our own as of the date hereof and are subject to change. BNP Paribas Capital (Malaysia) Sdn Bhd has no obligation to update its opinion or the information in this research report. This publication is strictly confidential and is for private circulation only to clients of BNP Paribas Capital (Malaysia) Sdn Bhd. This publication is being provided to you strictly on the basis that it will remain confidential. No part of this material may be (i) copied, photocopied, duplicated, stored or reproduced in any form by any means or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose without the prior written consent of BNP Paribas Capital (Malaysia) Sdn Bhd.

Philippines: This report is being distributed in the Philippines by BNP Paribas Manila Branch, an Offshore Banking Unit (OBU) of BNP Paribas whose head office is in Paris, France. BNP Paribas Manila OBU is registered as an offshore banking unit under Presidential Decree No. 1034 (PD 1034), and regulated by the Bangko Sentral ng Pilipinas. This report is being distributed in the Philippines to qualified clients of OBUs as allowed under PD 1034, and is qualified in its entirety to the products and services allowed under PD 1034.

Singapore: This report is distributed in Singapore by BNP Paribas Securities (Singapore) Pte Ltd ("BNPPSSL") and may be distributed in Singapore only to an Accredited or Institutional Investor, each as defined under the Financial Advisers Regulations ("FAR") and the Securities and Futures Act (Chapter 289) of Singapore, as amended from time to time. In relation to the distribution to such categories of investors, BNPPSSL and its representatives are exempted under Regulation 35 of the FAR from the requirements in Section 36 of the Financial Advisers Act of Singapore, regarding the disclosure of certain interests in, or certain interests in the acquisition or disposal of, securities referred to in this report. For Institutional and Accredited Investors in Singapore, please contact BNP Paribas Securities (Singapore) Ptd Ltd (company registration number: 199801966C; address: 10 Collyer Quay, 34/F Ocean Financial Centre, Singapore 049315; tel: (65) 6210 1288; fax: (65) 6210 1980) for all matters and queries relating to this report.

South Africa: In South Africa, BNP Paribas Cadiz Securities (Pty) Ltd and BNP Paribas Cadiz Stock Broking (Pty) Ltd (hereinafter referred to as “BNPP Cadiz”) are licensed members of Johannesburg Stock Exchange and are authorised Financial Services Providers and subject to regulation by the Financial Services Board. BNPP Cadiz does not expressly or by implication represent, recommend or propose that the financial products referred to in this report are appropriate to the particular investment objectives, financial situation or particular needs of the recipient.

Switzerland: This report is intended solely for customers who are “Qualified Investors” as defined in article 10 paragraphs 3 and 4 of the Swiss Federal Act on Collective Investment Schemes of 23 June 2006 (CISA) and the relevant provisions of the Swiss Federal Ordinance on Collective Investment Schemes of 22 November 2006 (CISO). “Qualified Investors” includes, among others, regulated financial intermediaries such as banks, securities dealers, fund management companies and asset managers of collective investment schemes, regulated insurance companies as well as pension funds and companies with professional treasury operations. This document may not be suitable for customers who are not Qualified Investors and should only be used and passed on to Qualified Investors. For specification purposes, a “Swiss Corporate Customer” is a Client which is a corporate entity, incorporated and existing under the laws of Switzerland and which qualifies as “Qualified Investor” as defined above." BNP Paribas (Suisse) SA is authorised as bank and as securities dealer by the Swiss Federal Market Supervisory Authority FINMA. BNP Paribas (Suisse) SA is registered at the Geneva commercial register under No. CH-270-3000542-1. BNP Paribas (Suisse) SA is incorporated in Switzerland with limited liability. Registered Office: 2 place de Hollande, CH-1204 Geneva.

Taiwan: Information on securities that trade in Taiwan is distributed by BNP Paribas Securities (Taiwan) Co., Ltd. Such information is for your reference only. The reader should independently evaluate the investment risks and is solely responsible for their investment decision. Information on securities that do not trade in Taiwan is for informational purposes only and is not to be construed as a recommendation or a solicitation to trade in such securities. BNP Paribas Securities (Taiwan) Co., Ltd. may not execute transactions for clients in these securities. This publication may not be distributed to the public media or quoted or used by the public media without the express written consent of BNP Paribas.

Thailand: Research relating to Thailand and Thailand based issuers is produced pursuant to an arrangement between BNP PARIBAS (“BNPP”) and Finansia Syrus Securities Public Company Limited (“FSS”). FSS International Investment Advisory Securities Co Ltd (“FSSIA”) prepares and distributes research under the brand name “BNP PARIBAS/FSS”. BNPP is not an affiliate of FSSIA or FSS. FSS also publishes a different research product under the brand name “FINANSIA SYRUS,” which is prepared by research analysts who are not part of FSSIA and who may cover the same securities, issuers, or industries that are the subject of this report. The ratings, recommendations, and views expressed in this report may differ from the ratings, recommendations, and views expressed by other research analysts or research teams employed by FSS. This report is being distributed outside Thailand by members of BNP Paribas.

Turkey: This report is being distributed in Turkey by TEB Investment (TEB YATIRIM MENKUL DEGERLER A.S., Teb Kampus D Blok Saray Mah. Kucuksu Cad. Sokullu Sok., No:7 34768 Umraniye, Istanbul, Turkey, Trade register number: 358354, www.tebyatirim.com.tr) and outside Turkey jointly by TEB Investment and BNP Paribas. Notice Published in accordance with “Communiqué Regarding the Principles on Investment Consultancy Activities and the Investment Consultancy Institutions” Series: V, No: 55 issued by the Capital Markets Board. The investment related information, commentary and recommendations contained herein do not constitute investment consultancy services. Investment consultancy services are provided in accordance with investment consultancy agreements executed between investors and brokerage companies or portfolio management companies or non-deposit accepting banks. The commentary and recommendations contained herein are based on the personal views of the persons who have made such commentary and recommendations. These views may not conform to your financial standing or to your risk and return preferences. Therefore, investment decisions based solely on the information provided herein may fail to produce results in accordance with your expectations.

United States: This report may be distributed in the United States only to U.S. Persons who are “major U.S. institutional investors” (as such term is defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) and is not intended for the use of any person or entity that is not a “major U.S. institutional investor”. U.S persons who wish to effect transactions in securities discussed herein must do so through BNP Paribas Securities Corp., a US-registered broker dealer and member of FINRA, SIPC, NFA, NYSE and other principal exchanges.

Certain countries within the European Economic Area: This document may only be distributed in the United Kingdom to eligible counterparties and professional clients and is not intended for, and should not be circulated to, retail clients (as such terms are defined in the Markets in Financial Instruments Directive 2004/39/EC (“MiFID”)). This document will have been approved for publication and distribution in the United Kingdom by BNP Paribas London Branch, a branch of BNP Paribas SA whose head office is in Paris, France. BNP Paribas SA is incorporated in France with limited liability with its registered office at 16 boulevard des Italiens, 75009 Paris. BNP Paribas London Branch (registered office: 10 Harewood Avenue, London NW1 6AA; tel: [44 20] 7595 2000; fax: [44 20] 7595 2555) is authorised by the Autorité de Contrôle Prudentiel and the Prudential Regulation Authority and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the Prudential Regulation Authority, and regulation by the Financial Conduct Authority are available from us on request.This report has been approved for publication in France by BNP Paribas, a credit institution licensed as an investment services provider by the Autorité de Contrôle Prudentiel whose head office is 16, Boulevard des Italiens 75009 Paris, France. This report is being distributed in Germany either by BNP Paribas London Branch or by BNP Paribas Niederlassung Frankfurt am Main, regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin).

Other Jurisdictions: The distribution of this report in other jurisdictions or to residents of other jurisdictions may also be restricted by law, and persons into whose possession this report comes should inform themselves about, and observe, any such restrictions. By accepting this report you agree to be bound by the foregoing instructions. This report is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

All research reports are disseminated and available to all clients simultaneously through our internal client websites. For all research available on a particular stock, please contact the relevant BNP Paribas research team or the author(s) of this report.

Additional Disclosures Target price history, stock price charts, valuation and risk details, and equity rating histories applicable to each company rated in this report is available in our most recently published reports available on our website: http://eqresearch.bnpparibas.com, or you can contact the analyst named on the front of this note or your BNP Paribas representative.

All share prices are as at market close on 3 April 2014 unless otherwise stated.



RECOMMENDATION STRUCTURE

Stock Ratings Stock ratings are based on absolute upside or downside, which we define as (target price* - current price) / current price. BUY (B). The upside is 10% or more. HOLD (H). The upside or downside is less than 10%. REDUCE (R). The downside is 10% or more. Unless otherwise specified, these recommendations are set with a 12-month horizon. Thus, it is possible that future price volatility may cause a temporary mismatch between upside/downside for a stock based on market price and the formal recommendation. * In most cases, the target price will equal the analyst's assessment of the current fair value of the stock. However, if the analyst doesn't think the market will reassess the stock over the specified time horizon due to a lack of events or catalysts, then the target price may differ from fair value. In most cases, therefore, our recommendation is an assessment of the mismatch between current market price and our assessment of current fair value.

Industry Recommendations Improving (é): The analyst expects the fundamental conditions of the sector to be positive over the next 12 months. Stable (previously known as Neutral) (çè): The analyst expects the fundamental conditions of the sector to be maintained over the next 12 months. Deteriorating (ê): The analyst expects the fundamental conditions of the sector to be negative over the next 12 months. Country (Strategy) Recommendations Overweight (O). Over the next 12 months, the analyst expects the market to score positively on two or more of the criteria used to determine market recommendations: index returns relative to the regional benchmark, index sharpe ratio relative to the regional benchmark and index returns relative to the market cost of equity. Neutral (N). Over the next 12 months, the analyst expects the market to score positively on one of the criteria used to determine market recommendations: index returns relative to the regional benchmark, index sharpe ratio relative to the regional benchmark and index returns relative to the market cost of equity. Underweight (U). Over the next 12 months, the analyst does not expect the market to score positively on any of the criteria used to determine market recommendations: index returns relative to the regional benchmark, index sharpe ratio relative to the regional benchmark and index returns relative to the market cost of equity.

RATING DISTRIBUTION (as at 3 April 2014)

Total BNP Paribas coverage universe 665 Investment Banking Relationship (%)

Buy 341 Buy 4.70

Hold 215 Hold 4.20

Reduce 109 Reduce 2.80

Should you require additional information concerning this report please contact the relevant BNP Paribas research team or the author(s) of this report.

© 2014 BNP Paribas Group

Documents

EARNINGS PREVIEWHONG KONG INSURANCE 10 AIA …pg.jrj.com.cn/acc/Res/HK_RES/STOCK/2014/4/3/f15a2b... · that AIA is in our Asia Interest Rate Sensitive Basket since mid-2013. ... CHANGE