FWD Group Holdings (1828.HK): Updating estimates ahead of 3Q26

FWD Group Holdings (1828.HK): Updating estimates ahead of 3Q26. FWD will report 3Q26 operating metrics on Nov 3, before market open. We expect 3Q26 VNB of US$281mn, +16% yoy, driven by strong growth in HK, Japan, and the EM segment. Thailand is likely to show muted growth, as FWD continues to work on improving business quality. We expect NB CSM to continue to grow at a faster pace, +19% yoy, reflecting improvements in expense underruns. APE growth is likely muted, +1%/-1% yoy on CER/AER basis, mainly due to the high base effect in HK, which included promotion product sales that didn't contribute to VNB. As a result, we expect HK to maintain the strong momentum carried from 1H26 (+24% yoy), despite a decline in APE in 3Q26. For FWD, this should drive a strong yoy margin expansion to 41% in 3Q26, vs. 35% in 3Q25. We fine-tune our estimates to reflect the latest sales and investment market movements. Our 12-month discounted model-based target price is HK$42 (unchanged), implying 0.8X FY27