AIA Shares Rise After Buybacks Boosted, Business Growth Beat

By Tracy Qu

AIA Group shares rose sharply after the insurance giant boosted its share buybacks and reported better-than-expected new-business growth in the first quarter.

Shares were up 7.3% in Hong Kong Monday afternoon at 57.95 Hong Kong dollars (US$7.40), trimming its year-to-date loss to 15%.

Hong Kong-based AIA on Monday said it would raise an existing buyback program to US$12 billion from US$10 billion in view of a "very strong financial position," adding that it had set a payout ratio target of 75% of annual net free surplus generation, in the form of dividends and buybacks, starting this year.

AIA also said that its value of new business in constant exchange rates rose 31% on year in the first quarter.

The additional share buyback program is surprising, and "even more material when set against" the approximately $3.3 billion in buybacks already expected this year, Jefferies analysts said in a research note. They added that the growth in the value of new business was well above their estimates. The analysts kept a buy rating on the stock with a target price of HK$96.00.

Citi analysts Michelle Ma and Amy Jy Chen also said in a research note the VONB growth strong, and beat their estimates for a 24% increase. They likewise maintained their buy rating, with a target price of HK$100.00.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

April 29, 2024 02:15 ET (06:15 GMT)

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