Core Viewpoint - FWD Group, controlled by Li Ka-shing's son Li Ze-kai, is nearing its IPO on the Hong Kong Stock Exchange, aiming to raise approximately HKD 34.71 billion, potentially increasing to HKD 39.92 billion with an over-allotment option [1][2] Company Overview - FWD Group plans to issue 91.34 million shares, with 10% allocated for public offering in Hong Kong and 90% for international investors [1] - The company is primarily an insurance enterprise, with Li Ze-kai and his entities holding 66.45% of the shares and over 30% of the voting rights [1] - Established in 2013 after acquiring insurance operations in Hong Kong, Macau, and Thailand, FWD Group has been preparing for an IPO for several years, having previously attempted listings in 2021 and 2022 [1][3] Market Position and Strategy - FWD Group has expanded its operations across Asia, covering markets in Japan, Singapore, and Vietnam, with core contributions from Hong Kong, Macau, and Thailand [5] - The company has been actively trying to penetrate the mainland China insurance market since 2014 but has faced regulatory challenges, leading to a focus on cross-border business to attract mainland clients [6] Financial Performance - FWD Group has reported significant losses over the years, with a cumulative loss exceeding USD 1.35 billion over six years, only achieving profitability in two of those years [7][8] - The company’s annualized new premium increased from USD 309 million in 2014 to USD 1.916 billion in 2024, indicating a growth rate of 5.2 times [7] - Despite the growth in new premiums, the company has struggled with profitability, reporting net losses of USD 320 million, USD 717 million, and a profit of USD 10 million in the last three years [7][8] Debt and Financial Health - FWD Group's total liabilities are projected to reach USD 3.641 billion by the end of 2024, with a debt ratio of 87.31%, raising concerns about the impact on shareholders and future operations [9] - The company has expanded its market presence primarily through acquisitions, which have also contributed to its debt levels [8][9] Upcoming Developments - The IPO is set to take place on July 7, and the market performance of FWD Group will be closely monitored as it joins the ranks of other companies under Li Ze-kai's control [2][10]

Core Insights - The article discusses the recent IPO of FWD Group, a company founded by Li Ka-shing's son, which has faced challenges in its valuation and market reception [6][17]. Company Overview - FWD Group was established in 2013 by Li Ka-shing's son, Li Ze-kai, through the acquisition of ING Group's insurance business in Hong Kong, Macau, and Thailand for $2.14 billion [7]. - The company operates in 10 markets across Asia, including Hong Kong, Macau, Thailand, Japan, and Southeast Asia [7][8]. IPO Details - The IPO period for FWD Group was from June 26 to July 2, with a total of 91.34 million shares issued, 10% for public sale and 90% for international placement [7]. - The offering price was set at HKD 38, aiming to raise approximately HKD 3.471 billion [17]. - The company has a market capitalization of HKD 48.298 billion and a price-to-earnings ratio indicating losses [7]. Financial Performance - FWD Group's insurance revenue for 2022 was $240.8 million, with projected revenues of $275.6 million in 2023 and $272.4 million in 2024 [9]. - The net profit for the years 2022, 2023, and 2024 is projected to be -$320 million, -$717 million, and $10 million, respectively [9]. Market Position - FWD Group ranks as the fifth largest insurance company in Southeast Asia with a market share of 4.7%, and it holds the tenth position in Hong Kong and Macau with a market share of 3.6% [8]. - In Thailand, it ranks second with a market share of 17.7% [8]. Growth Potential - The company has shown a 30.5% year-on-year growth in contract service margin (CSM) and a 31.9% increase in new business value in Q1 2025, indicating strong growth potential [11]. - The company has established an e-commerce platform, with online direct sales accounting for 6.5% of total sales, which is above the industry average [12]. Valuation Insights - FWD Group's valuation is considered reasonable with a price-to-book (PB) ratio of 0.9, compared to peers like AIA and Manulife, which have higher PB ratios [15]. - The company has faced challenges in previous IPO attempts, leading to a reduced valuation from an expected $10 billion to $6.1 billion for this offering [17]. Market Dynamics - The recent trend of mainland Chinese customers purchasing insurance in Hong Kong has positively impacted the performance of local insurance companies, including FWD Group [17]. - The IPO's success is contingent on market conditions and investor interest, with a low initial subscription rate observed [19].