Dahua Jixian has issued a research report noting that mainland China initiated a large-scale cross-border capital regulation campaign in late May, targeting illegal cross-border securities trading and capital outflows, and for the first time included individuals within the regulatory framework for outward investment. The firm suggests the market may have overreacted to the potential impact of these new measures on AIA's (SEHK: 01299) Mainland China Visitor (MCV) business. Under its base-case scenario, a complete ban is not anticipated, though some degree of tightening is possible. The "Buy" rating is maintained, with the target price lowered from HK$109 to HK$100.

The report indicates that due to a higher base in Mainland China and Hong Kong, the firm expects the company's second-quarter Value of New Business (VONB) growth to slow to 13% year-on-year. For the first half of the year, VONB is forecast to increase by 15% year-on-year.

Dahua Jixian has reduced its VONB forecasts for AIA for the years 2026 to 2028 by 3.5%, 1.8%, and 3.6% respectively, reflecting a downward revision for the Hong Kong market. The forecast for post-tax operating profit for the current year has also been lowered by 2.4%, accounting for a reduction in the net investment income forecast.

The current depressed valuation may attract some long-term investors. If AIA can sustain its VONB growth momentum in Mainland China and other ASEAN markets and provide greater clarity on MCV sales, the upcoming first-half results announcement could serve as a significant catalyst for a valuation re-rating.