Agree with Lilo. Your kid is still small he/she may not reach the wider range of notes and flow of the songs for grade 3/above.
U can consider apply HKSchool Music festival grade 1 or 2, to gain some performance experience. Then consult teacher whether to take grade 2 or 3 ABRSM, depends on his/her ability.
Note that Grade 3 will require to play 3 songs + scales + aural + sight-reading, better to take at least 7-9 month's learning+pracitce to prepare for exam (base on normal speed/ability... if yr kid picks up v.fast may be shorter time).
Most important of all is to let the kid to gain confidence and experience through the performance, if u take much advance level the kid may feel v.stress and discourage...