Morgan Stanley: Raises the target price for FWD (01828) to HKD 41.9 and increases the forecast for the new business value for the fiscal years 2026 to 2028.

Morgan Stanley released a research report stating that it has raised the target price for FWD (01828) from HKD 40.1 to HKD 41.9, with a rating of "Overweight." The bank has increased its new business value forecasts for the fiscal years 2026 to 2028 by 5.8%, 5.4%, and 5.7%, driven primarily by strong growth and higher profit margins in its Hong Kong and Japan operations in the first half of the year. Morgan Stanley indicated that the upgraded forecasts imply a compound annual growth rate for FWD's new business value for the fiscal years 2026 to 2028 of 18.2%, 11.7%, and 12.2% in real terms, with the new business value growth for 2026 likely being one of the highest within the bank's coverage. Furthermore, the bank has raised its forecasts for the company's after-tax operating profit for the fiscal years 2026 to 2028 by 13.4%, 14.9%, and 14.1%, which translates to after-tax operating profit growth rates of 15.1%, 14.9%, and 14.6% for those years. Regarding earnings per share, the bank has lowered its forecast for this year by 4%, while raising the forecasts for the next two years by 10% and 14%, respectively. Morgan Stanley noted that the target price increase also reflects the ongoing strong growth in emerging markets, a reduced exposure to the inbound visitor business (MCV) from the mainland, an enhanced market share in Japan's savings business, improvements in its Thailand operations, and a valuation adjustment.