Earnings Inflection Underpriced. Initiate at Buy

Research evidence excerpt

Earnings Inflection Underpriced. Initiate at Buy

Premium Equivalent (APE)

EPS is IFRS OPAT per Share

Growth is normalising, not deteriorating. FWD has delivered ~12% CAGR growth in both

APE and VNB since 2019. The recent slowdown to 4% APE growth and 7% VNB growth in

1Q26 largely reflects difficult comparisons following an exceptionally strong period in Hong RoEV inflected in 2025 as variance drag

normalises, and building towards mid-teens

Kong rather than weaker underlying demand. Growth remains healthy in Japan and Emerging level

Markets, supporting our expectation for a return to low-teens growth from 2027e.

MCV concerns appear manageable. Investor sentiment has weakened amid renewed

concerns over cross-border capital flows and potential implications for Mainland Chinese

Visitor (MCV) sales. However, MCV contributes only around 13% of group APE and VNB,

limiting the impact on overall earnings.

Valuation does not reflect improving fundamentals. FWD trades at a 30-50% discount to

.

AIA and Prudential on P/EV despite delivering broadly comparable growth across key metrics. Source: Company reports, Jefferies

Some discount is justified given its shorter track record, lower free float and savings-heavy

FWD's growth is comparable to AIA andproduct mix, but we believe these factors are already reflected in the valuation. Prudential, but valuation reflects an overly

steep discount

Attractive risk/reward. Our valuation is based on a conservative EV framework, applying 0.5x 25.0%

P/EV to the back book and approximately 5x P/VNB to the front book, implying a target 20.0% 19% 19%

13%valuation of around 0.9x P/EV. We do not require a return to peak growth or full convergence 15.0% 14% 15% 15%

11% 11% 11% 10% 11% 10%

with peers to justify our price target.