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AIA(1299)
Analysis¡G
On September 24th, the State Council Information Office held a press conference on "Financial Support for High-Quality Economic Development." From the perspective of the insurance industry, regulatory support for the healthy development of the real estate industry is beneficial for reducing investment risks of insurance funds and safeguarding companies` investment returns. At the same time, reserve ratio cuts, interest rate reductions, and new monetary policy tools effectively reduce financing costs for insurance enterprises, expand investment scale, and improve the performance of insurance companies in the context of market stimulus policies. In the first eight months of this year, the combined premium income of the five major listed insurance companies in A shares reached 2.17 trillion yuan, an increase of 5.6% year-on-year. Benefiting from the window period of declining pricing interest rates for insurance products, new business for listed insurance companies in the life insurance sector grew by over 40% in August. AIA Group Limited is a listed life insurance and securities group covering 18 markets in the Asia-Pacific region, including Hong Kong. It is committed to providing high-quality insurance services for individuals and businesses, covering life insurance, medical insurance, accident insurance, and injury insurance. As of the six months ended June 30, 2024, the performance showed that the new business value grew by 25% to $2.45 billion, with annualized new premiums increasing by 17% to $4.55 billion. After-tax operating profit per share and basic earnings per share both increased by 10%, and the interim dividend per share increased by 5.2% to HK$0.445.
Strategy¡G
Buy-in Price: $60.65, Target Price: $66.72, Cut Loss Price: $54.80
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Report Review of August 2024
Sectors: TMT, Semiconductors, Consumer & Healthcare ¡]Eric Li¡^ TMT, Semiconductors, Consumer & Healthcare ¡]Eric Li¡^This month I released reports of 361 DEGREES INT. (1361.HK). During 2023FY, 361 Degrees International Limited (361 Degrees) recorded a revenue of RMB8,423.3mn, increasing 21.0% YoY. Profit attributable to the equity shareholders of the Company was RMB961mn, representing a YoY increase of 28.7%. A total dividend of HK20.4 cents per ordinary share (equivalent to RMB18.7 cents), representing a dividend payout ratio of 40.2%. In terms of product segment, sales of the company's two core product lines, namely footwear and apparel, increased by 23.0% YoY and 9.8% YoY respectively. For the year under review, the proportions of total revenue of footwear and apparel sales were slightly increased from 41.0% to 41.7% YoY and slightly decreased from 35.2% to 31.9% YoY of the total revenue respectively. This was mainly due to the increase in proportion of sales revenue from 361 Degrees Kids from 20.7% to 23.2% of the total revenue for the year under review, which in turn affected the proportion of sales of various products to total revenue. The average wholesale price (AWP) of footwear and apparel edged up by 3.0% and 0.5% year-on-year respectively. The increase in footwear's and apparel's AWP was mainly due to the upward adjustments of the wholesale prices of the existing products across different product lines in order to cover the increase in cost of production and reflect the continuous brand image enhancement; the upgrade of product mix by launching a variety of new products with a higher AWP; and the increase in proportion of sales revenue generated from the e-commerce business which has a higher AWP than the sales made to distributors, above reasons contributed to increase in AWP as compared to that of last year. In addition, the sales volume of footwear and apparel products increased by 19.4% and 9.4% YoY, respectively. In recent years, as China's consumer preferences leaned towards specialisation, diversification, and cost effectiveness, the company positions as a "professional, youthful, and internationalised" brand. The company has built a diversified brand matrix based on professional functions and its own-branded IP. With 2024 bringing numerous international and domestic sports events, including the highly anticipated Paris Olympics, which are expected to stimulate a broader participation in sports and increase consumer demand. We expect 2024-2025 EPS to be RMB0.49 and RMB0.53 respectively, with PT of HKD4.02, implies a FY2024E P/E of 7.47x (~2-yrs historical average). Our investment rating is ¡§Accumulate¡¨. 
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