Komo: Fuwei Group (01828)'s new business value for the third quarter beat the expected target price of HK$48

The Zhitong Finance App learned that J.P. Morgan Chase released a research report saying that Fuwei Group (01828)'s operating data for the third quarter slightly beat this forecast, confirming that the pace of growth remains on track. It is supported by a diverse regional portfolio and maintains an “increase in holdings” rating, with a target price of HK$48.

The company's new business value (NBV) reached US$276 million during the period, up 14% year over year at the real exchange rate, higher than the bank's expected 11% increase. Based on the weak sales growth trend or negative growth of Hong Kong and mainland insurance companies in the third quarter, the bank believes that FW's performance was strong.

The report mentioned that growth was mainly driven by the Japanese and ASEAN markets, and the bank was also pleasantly surprised by the resilient sales momentum in Hong Kong, China. The value growth of the new business remained strong at 13% in the third quarter. The bank believes that the strongest investment rationale is that the Group's cash generation is still expected to exceed the investment and financing costs of new businesses, while maintaining an adequate capital base. As of June of this year, the Group's solvency ratio is 203 percent, and no bonds will expire until 2030. As a result, the bank expects the stock price to increasingly reflect the expansion of its life insurance sales scale and cash generation.

The bank predicts a 15% year-on-year increase in value for the fourth quarter and an 11% year-on-year increase for the 2027 fiscal year. According to estimates, for every 50 basis point increase in interest rates, the value of Fuwei Group's new business increased by 6.6%, while Interbank AIA (01299) was only 0.8%. The bank believes that FW's current valuation is not expensive, and its stock price has outperformed the Hang Seng Index by 14 percentage points since the beginning of the year.