Ann: July 2017 - Monthly Traffic Update, page-11

@hummer

With a current EBIT/Interest cover of 5.7x (excluding property revals), I don’t see debt as being an issue at all; it is actually good that they are taking advantage of the current low interest-rate (and credit spread) environment to cheaply finance future growth.

Agree with you about the stellar performance over time. One possible reason why this stock might be flying under the radar (if you excuse me the pun), is that ratios such as ROE or ROCE have been distorted (in a negative way) by the constant PP&E and Property Investment revals that have occurred over the years, inflating the Book Value.

Adjusting for that (i.e. re-calculating those ratios valuing PP&E and Investment Property at cost), I currently see a ROE of 48.0%, ROCE of 23.0% and ROE-WACC of 19.5%, which are both all-time highs and (in absolute terms) truly mouth-watering levels. Certainly high enough, in my modest opinion, to make the current valuation of AIA very attractive, on a risk-adjusted basis.

IMHO & DYOR