AIA Group (SEHK:1299) Valuation in Focus After Record 25% Q3 New Business Growth

AIA Group (SEHK:1299) just posted a record 25% increase in third-quarter value of new business, largely fueled by growth across key Asian markets as well as a boost in agency performance and recruitment.

See our latest analysis for AIA Group.

The upbeat third-quarter report has sparked renewed optimism, sending AIA Group's share price up 11% over the past week and 45% year-to-date. Investors appear to be rewarding both the company’s solid execution across Asian markets and its long-term earnings growth. This is reflected in a 12-month total shareholder return of 33%, which outpaces its long-term averages.

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Given these standout results and a rapid share price climb, the key question now is whether AIA Group remains undervalued or if the market has already priced in its promising growth story. This could potentially limit further upside for new investors.

Most Popular Narrative: 14.7% Undervalued

Compared to its last close price of HK$79.95, the widely followed fair value narrative points to a higher value for AIA Group, implying notable upside. This sets the tone for debate on whether current earnings momentum and business quality truly justify a premium valuation.

The company's focus on high-value protection and low-guarantee fee-based products (now nearly 90% of new business) has resulted in resilient, predictable cash flows and strong margins. This supports sustainable earnings and embedded value growth and positions AIA defensively against interest rate volatility and market cycles, underpinning profitability.

Read the complete narrative.

Want to know what pushes this stock’s fair value so far above market price? The narrative builds around one core, recurring financial trend and a profit playbook that sidesteps the usual insurance traps. Curious which levers make AIA’s valuation tick? Uncover the forward-thinking numbers and the one controversial assumption that analysts can’t agree on.

Result: Fair Value of $93.74 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, a slowdown in key Asian economies or heightened regulatory changes could quickly undermine AIA's earnings momentum and the current valuation narrative.

Find out about the key risks to this AIA Group narrative.

Another View: Multiple-Based Valuation Sends a Warning

Looking at AIA Group through the lens of price-to-earnings, the shares trade at 17.8x, which is well above the Asian insurance industry average of 11.2x and even above their own fair ratio estimate of 11.5x. This gap suggests the stock currently carries a premium, raising the risk that future returns could be muted if the market sentiment cools. Does the underlying quality alone justify paying up?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own AIA Group Narrative

If you're not convinced by these interpretations or want a deeper dive yourself, you have all the tools to build your own take in just a few minutes. Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding AIA Group.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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