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Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*A Poor Set Of Results: AIA Group (1299.HK) (AIA) reported 4Q20 Value of New Business (VONB) of USD 2.8 bn -  down 33% YOY, and net profit of USD 5.8 bn – down 3% over the period. 4Q20 VONB amounted to USD 639 mn, down 31% YOY.  The VONB decline can be attributed largely to weaker volumes and margins caused by mainland China’s new withholding tax, expense overruns in Hong Kong, along with product/mix shifts resultant of pandemic restrictions; and *No Hong Kong Rebound In Sight: The focus should remain Hong Kong, where a 66% YOY decline in VONB occurred as its border with mainland China continued to remain closed due to COVID-19 restrictions. This should continue to weigh on results over the next few quarters as well.

*A Poor Set Of Results: AIA Group (1299.HK) (AIA) reported 4Q20 Value of New Business (VONB) of USD 2.8 bn -  down 33% YOY, and net profit of USD 5.8 bn – down 3% over the period. 4Q20 VONB amounted to USD 639 mn, down 31% YOY.  The VONB decline can be attributed largely to weaker volumes and margins caused by mainland China’s new withholding tax, expense overruns in Hong Kong, along with product/mix shifts resultant of pandemic restrictions; and *No Hong Kong Rebound In Sight: The focus should remain Hong Kong, where a 66% YOY decline in VONB occurred as its border with mainland China continued to remain closed due to COVID-19 restrictions. This should continue to weigh on results over the next few quarters as well.   

AIA Group Ltd

AIA Group – Low Base Leverage