Goldman Sachs has released a research report indicating that the recent share price performance of AIA (01299) already reflects structural disruptions in its Mainland Chinese Visitor (MCV) business, with the growth slowdown likely to be temporary. The firm views the risk-reward profile as attractive, trimming its 12-month target price from HK$97 to HK$96 while maintaining a "Buy" rating.

In AIA's first-half results, Hong Kong sales underperformed expectations, primarily due to a high base effect in the MCV segment, whereas the local business demonstrated robust growth momentum. Goldman believes the high-base impact has been well flagged, shifting the market's near-term focus to third-quarter results as the first data point for investors to assess the impact of various regulatory announcements on customer demand.

The bank expressed encouragement over the quarter-on-quarter improvement in MCV new business value (VONB) compared to the first quarter. However, given the more challenging high-base effect in the second half, the firm has lowered its sales forecasts, now expecting only low single-digit growth in Hong Kong VONB for the latter half of this year.

Goldman emphasized that Hong Kong's structural growth story remains intact, projecting an 18% compound annual growth rate in VONB from 2023 to 2026, and anticipates a recovery to mid-teens growth for Hong Kong by fiscal 2027. In response to the first-half results, the firm has updated its forecasts, reducing VONB projections for fiscal 2026 to 2028 by 2% to 3%, mainly reflecting weaker Hong Kong sales, partially offset by strong momentum in ASEAN markets. Additionally, due to unrealized losses in the bond portfolio, book value forecasts for fiscal 2026 to 2028 have been cut by 5% to 7%.