UBS expects that AIA's stock price decline last week was due to profit-taking, and it remains a beneficiary of deposit migration from the mainland

UBS's research report pointed out that AIA Group (01299.HK) saw its stock price drop by 8% over the two trading days last Thursday and Friday (February 5 and 6), but no specific news regarding the company was found. This adjustment may be due to investors taking profits after the group outperformed the Hang Seng Index by 13 percentage points over the past two months. Some investors believe that buying on dips presents a good opportunity, as AIA's performance last year is expected to be solid, and the medium to long-term outlook is optimistic.

UBS also noted that due to temporary factors (such as regulatory changes in Thailand and Hong Kong last year) causing a high base, some investors expressed concerns about the pressure on new business value growth this year. However, they emphasized the growth opportunities from the migration of deposits from mainland China. Although bancassurance is not AIA's focus, it can still leverage its elite agency team targeting middle-class and affluent clients to provide mainland tourists with a wider range of investment options and higher expected returns through Hong Kong insurance products, thereby seizing opportunities. Given AIA's emphasis on protection-oriented products and strong distribution capabilities, it is likely to become a major beneficiary.

UBS set a target price of HKD 106 for AIA, with a rating of "Buy."