Earnings Inflection Underpriced. Initiate at Buy

研报英文原文证据摘录

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.