RIGHT ISSUE VALUATION OF AIA (1299/HKG) FOR BUSINESS EXPANSION
AIA Group Limited is the largest listed independent life insurance company with existence in 18 region with branches and subsidiaries throughout Asia Pacific. As of 31st December 2018, AIA has total assets of US$230 billion with a wide network of partners, employees and agents throughout Asia-Pacif...
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| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/49291 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | AIA Group Limited is the largest listed independent life insurance company with existence in 18 region with branches and subsidiaries throughout Asia Pacific. As of 31st December 2018, AIA has total assets of US$230 billion with a wide network of partners, employees and agents throughout Asia-Pacific. Due to the needs of general corporate purpose of AIA including strategic partnership and business expansion, AIA has made application to The Stock Exchange of Hong Kong for the listing of US$ 8,000,000,000 Global Medium Term Note and Securities Programme for a period of 12 months of debt issues on 13th March 2020. In 1st April 2020, AIA only had successfully priced US$ 1,000,000,000 of 3.375% unsecured fixed rate noted due in 2030. This research performed valuation to AIA as option of fulfilling capital through right issue. The valuation will be conducted using income approach of Discounted Return Models (Free Cash Flow to Equity Model and Excess Return Model) as well as conduct Market Multiple Valuation as market based approach valuation. Intrinsic equity value per share of AIA estimated using Free Cash Flow to Equity Model, resulted value of US$ 12.53 or equal to 97.62 HKD. While intrinsic value per share of AIA calculated using Excess Return Model resulted stock value of US$ 10.33 or equal to 80.48 HKD. Author calculated the price per share of AIA using earnings per share and net income stated in AIA Annual Report 2019 and market capitalization information from the list of companies 2019, resulted price of US$ 9.85 or equal to 76.74 HKD. New share issuance of AIA from the right issue would be as much as 558,690,808 – 710,659,898 shares, depends on offered share price that should considering average closing price from the last five trading days as well as restriction of maximum 25% dilution as regulated by Hong Kong Stock Exchange. |
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