JPMorgan has issued a research report initiating coverage on FWD Group (01828) with an "Overweight" rating and a target price of HK$50. This valuation represents approximately 1.1 times the projected embedded value for the 2027 fiscal year. The firm forecasts that FWD's new business value will reach $1.1 billion by FY2027, a level comparable to AIA's $1.2 billion new business value in 2012. The bank considers the current stock price, which trades at a discount to its reported embedded value, to be inexpensive.

FWD is one of the largest life insurers in the Pan-Asian region, with significant operations in Hong Kong, Thailand, and Japan. JPMorgan believes the company has a compelling growth narrative and expects its new business value to sustain a 10% growth rate over the next two years, alongside a 16% compound annual growth rate in operating profit.

The report highlights that FWD has established a differentiated business and customer portfolio. In FY2024, total annualized premiums were distributed as follows: Hong Kong contributed 42%, ASEAN markets 52%, and Japan 6%, supported by a multi-channel structure. Notably, Thailand accounted for 30% of new business, making FWD the second-largest insurer in Thailand with a 15% market share. JPMorgan suggests that a recovery in ASEAN markets or a rebound in Thai operations could serve as key upside catalysts.