AXA Asia Pacific FY03 result - strong HK performance [7 pages; Annual result] The FY03 result for AXA highlighted a strong underlying improvement in the profitability of its Hong Kong operations.
However, the improvement was drowned out by the impact of the currency, with operating margins flat on CY02, and likely to be impacted further in CY04F due to the delayed impact flowing through the P&L.
While positive sign continue to emerge of the benefits of the transformation strategy, in our view this is more likely to be a medium-term story.
We retain our Neutral rating. While the results were good and continue to highlight the positive impact of the strategic transformation, in our view, better relative value lies elsewhere at this point in time. We have upgraded our FY04F earnings by 6% and FY05F by 2%, and have raised our 12-month price target from $2.85 to $3.10 per share, mainly reflecting the underlying improvement in Hong Kong.
AXA Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
