J.P. Morgan has issued a research note on AIA (01299), maintaining an "overweight" rating and raising the price target from HK$112 to HK$118, reflecting a valuation roll-forward from the end of 2026 to the end of 2027.

AIA shares have underperformed slightly year-to-date, falling 0.3% compared to the Hang Seng Index's 0.9% gain. The stock is currently trading at 1.1 times its 2027 estimated price-to-embedded value (P/EV), with a total shareholder return yield of approximately 4%.

The bank expects AIA to deliver solid results for the first half of 2026, forecasting new business value (NBV) of US$3.26 billion, up 15% year-on-year, and operating profit after tax of US$3.97 billion, a 10% increase. The interim dividend is projected at HK$0.54 per share, also up 10%, supported by a steady expansion of the balance sheet and double-digit growth in both life insurance sales and cash flow.

However, J.P. Morgan noted that near-term catalysts for AIA are limited, and visibility regarding Hong Kong's offshore regulatory environment is unlikely to improve significantly in the short term. Consequently, ahead of the first-half 2026 results, the bank prefers Chinese insurers China Ping An (02318) and China Life (02628), citing their more attractive relative valuations and yields.