Jefferies: Target price of HK$37.4 for the initial “buy” rating for FW Group (01828)

The Zhitong Finance App learned that Jefferies released a research report saying that Fuwei Group (01828) has a double-digit increase in Asian life insurance exposure and a profit trend of continuous improvement, but currently it is only trading at about 0.7 times P/EV. The bank believes that investors are paying too much attention to the recent slowdown in sales growth while underestimating the significant improvement in the company's profit quality. The “Buy” rating was covered for the first time, and the target price was HK$37.4.

According to the report, the company's APE growth slowed to 4% and VNB growth to 7% in the first quarter of 2026, mainly reflecting the high base period effect brought about by the abnormal strength of the Hong Kong market in the early stages, rather than weakening basic demand. The company's growth in Japan and emerging markets remains steady, supporting the bank's expectation that the company's related growth will rise back to about 10% to 13% (low-teens) starting in 2027.

Additionally, the bank pointed out that investor sentiment has weakened as concerns about cross-border capital flows have once again heated up, and fears that it may affect mainland visitor (MCV) sales. However, MCV only contributes about 13% of the Group's APE and VNB, and its impact on overall profits is limited.