Jefferies has released a research report stating that FWD's (01828) new business value growth quality improved in the first three quarters, and it maintained a "Buy" rating with a target price of HK$40.9.
FWD's new business value (VNB) grew 18% in the first three quarters at constant exchange rates, with the third quarter also maintaining 18% growth, consistent with the first-half pace. This was supported by an improved margin structure that offset sales impact. The growth rate met market expectations and is unlikely to trigger significant earnings forecast adjustments, while continuing to demonstrate improving growth quality.
The bank noted that Hong Kong business trends are positive, with recent regulatory concerns not damaging underlying market growth momentum. Hong Kong VNB grew 13% in the third quarter, with Mainland visitor business recording double-digit growth. As the second-largest business segment, Thailand's third-quarter sales returned to growth, up 1% year-on-year, reversing four consecutive quarters of contraction and showing that the new leadership's efforts to revitalize the business are yielding initial results.
The company expects fourth-quarter VNB margin to decline due to seasonal factors, with the full year expected to improve year-on-year.
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