香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示概不對因本公告全部或任何部分內容而產生或因倚賴該等內容 而引致的任何損失承擔任何責任。 BOC AVIATION LIMITED 中銀航空租賃有限公司 * （於新加坡共和國註冊成立的有限公司） 股份代號：2588 截至2024年6月30日止六個月的 中期業績公告 財務摘要 我們截至2024年6月30日止六個月的財務摘要如下： • 經營收入及其他收入總額為11.74億美元，較去年的10.61億美元增長11% • 稅後淨利潤為4.60億美元，較2023年上半年的2.62億美元增長76% • 每股收益為0.66美元，較2023年上半年的每股0.38美元亦上升76% • 董事會宣派中期股息每股0.1988美元，2023年上半年為每股0.1131美元 • 截至2024年6月30日的資產總額為243億美元，與2023年12月31日持平，淨資 產有史以來首次超過60億美元 • 錄得上半年經營現金流量（扣除利息）9.08億美元 • 流動性保持強勁，截至2024年6月30日，除49億美元未動用已承諾貸款授信 ...

[Table_Title] 【广发非银&海外】中银航空租赁 （02588.HK） 利润弹性大于预期，估值稳健上行 [Table_Summary] 核心观点： ⚫ 2024 年 8 月 5 日公司发布正面盈利预告，公告显示公司 2024 年上半 年净利润同比增速在 70-80%，主因 2024 年 3 月初自俄罗斯收回的 2 架飞机带来的增量影响。 ⚫ 复盘 2023 年俄罗斯保险赔付金额，首先，2022 年俄乌冲突为公司带 来 5.07 亿美元的净亏损。2023 年 11 月俄罗斯保险公司针对滞留俄罗 斯的 8 架飞机赔付 2.08 亿美元，到 2023 年底俄罗斯保险公司已针对 11 架飞机赔付 2.58 亿美元。 ⚫ （1）飞机销售数量：公司 2024H1 销售自有飞机 15 架，2023 年 H1 同期仅销售 3 架飞机，参考同业公司，截至 24H1，AERCAP\AIRLEASE 共计销售 64、16 架，去年同期销售 49、10 架，亦有所增长，一定程 度反应波音交付下滑加快航司向飞机租赁公司购买飞机的动作，同时， 飞机销售数量的增长有望推高销售净额。 ⚫ （2）应收租赁款增长：公司应收租赁款在 2 ...

Investment Rating - The report assigns a "Buy" rating to the company, with a target price of 78 HKD per share, compared to the current price of 56.50 HKD [7]. Core Insights - The company reported significant improvement in operational data, particularly in aircraft sales, which is expected to drive revenue growth in the first half of 2024 [2][3]. - The average age of the company's owned fleet increased to 4.9 years as of Q2 2024, up from 4.6 years in 2023, indicating a potential increase in sales of older assets [3]. - The delivery of aircraft has been negatively impacted, with Boeing and Airbus delivering 131 and 256 aircraft respectively from January to May 2024, compared to 206 and 244 in the same period of 2023 [4]. - The decline in delivery levels is expected to support continued growth in rental income [4]. - The company benefits from a decrease in interest costs due to lower U.S. Treasury yields, which may enhance profit margins [5]. - Profit forecasts indicate a net profit of 840 million USD for 2024 and 885 million USD for 2025, with core net profit expected to grow significantly in a declining interest rate environment [5]. Summary by Sections Operational Performance - The company delivered a total of 18 aircraft and sold 15 in the first half of 2024, compared to 16 deliveries and 3 sales in the same period last year [2]. - Increased aircraft sales are anticipated to contribute to revenue growth in the first half of 2024 [3]. Delivery and Rental Income - The overall delivery levels of Boeing and Airbus have decreased, which is expected to positively impact rental income due to supply constraints [4]. Financial Projections - The company is projected to achieve revenues of 2,307 million USD in 2024, with a growth rate of 9.90% [6]. - The net profit is expected to grow at a rate of 9.95% in 2024, reaching 840 million USD [6].

证券研究报告 中银航空租赁 (2588 HK) 港股通 2Q24:飞机交付 13 架,售出 11 架 华泰研究 公告点评 2024 年 7 月 09 日│中国香港 租赁 | | | |-------------------------------|---------------------------| | 投资评级(维持): | 买入 | | 目标价(港币): | 78.00 | | 研究员 SAC No. S0570521010001 | 李健,PhDlijian@htsc.com | | SFC No. AWF297 | +(852) 3658 6112 | | 联系人 | 陈宇轩 | | SAC No. S0570122070171 | chenyuxuan020827@htsc.com | | | +(86) 21 2897 2228 | 稳健经营,发行公司史上最窄利差的美元债券 中银航空租赁(BOCA)7 月 8 日披露了 2Q24 运营数据。2Q24 末,公司 自有飞机数量提升至 429 架(1Q24:427 架),自有飞机利用率环比持平。 飞机机龄和剩余租期保持健康。在飞机价值的上升周期中,公 ...

Investment Rating - The report initiates coverage with a "Buy" rating and sets a target price of HKD 79.94, corresponding to a 2024 P/B of 1.14x [3][4]. Core Views - The report highlights that the improvement in performance is driven by both asset and liability sides, with expectations of revenue growth from increased leasing rates and reduced financing costs due to anticipated interest rate declines [3][25]. - The demand for air transport is recovering, leading to an expected increase in leasing rates, while the company's financing costs are projected to decrease as global interest rates decline [3][36]. Summary by Sections 1. Company Overview - The report identifies the company as one of the largest aircraft operating leasing firms globally, with a strong management team and a focus on operational leasing, which alleviates cash flow pressures for airlines [9][19]. - The company has shown resilience and recovery in performance post-pandemic, with a significant rebound in 2023 [25][22]. 2. Supply and Demand Dynamics - The report notes a mismatch in supply and demand, with strong aircraft demand driving rental yield increases, while financing costs are expected to decline due to lower interest rates [3][38]. - The aircraft manufacturing capacity is limited, primarily relying on Boeing and Airbus, which affects the supply of new aircraft to meet rising demand [38]. 3. Financial Projections - Revenue forecasts for 2024-2026 are projected at USD 2.533 billion, USD 2.697 billion, and USD 2.835 billion, reflecting year-on-year growth rates of 2.9%, 6.5%, and 5.1% respectively [3][7]. - Net profit estimates for the same period are USD 783 million, USD 892 million, and USD 991 million, with growth rates of 2.5%, 13.9%, and 11.2% respectively [3][7]. 4. Revenue Composition - In 2023, the company achieved rental income of USD 1.911 billion, accounting for 77.6% of total revenue, with a year-on-year growth of 7.1% [27][29]. - The increase in rental income is attributed to the growth in the number of aircraft in the operating lease fleet and improved rental yield [27][29].

Investment Rating - The report initiates coverage on BOC Aviation (2588 HK) with an "Overweight" rating and a target price of HKD 69 92, representing a 24x PB multiple for 2024 [1][8] Core Views - BOC Aviation is a leading aircraft leasing company with a competitive edge in transaction structuring, low-cost financing, negotiation capabilities, and aircraft asset management [1][3] - The company's short-term profitability was impacted by the pandemic and the Russia-Ukraine conflict, but its cash flow remained stable due to robust legal frameworks in the aviation leasing industry [1] - With the recovery of global aviation demand and potential interest rate declines, BOC Aviation's profitability is expected to surpass pre-pandemic levels [1][4] Business Overview - BOC Aviation operates primarily in operating leases, sale-and-leaseback, and third-party asset management services, with a fleet of 426 owned aircraft as of December 2023 [1] - The company's fleet is well-diversified, with 80% consisting of narrow-body aircraft, and it has a strong order book of 224 aircraft as of December 2023 [30][51] - BOC Aviation's revenue and profitability have shown resilience, with 2023 revenue reaching USD 2 46 billion, up 6 7% YoY, and net profit recovering to USD 763 9 million [33] Competitive Advantages - **Transaction Structuring**: The company maintains an effective tax rate of around 10%, lower than peers, due to its expertise in structuring cross-border transactions [1][43] - **Low-Cost Financing**: BOC Aviation benefits from a strong credit rating, long operating history, and support from its parent company, Bank of China, enabling it to maintain a low debt cost of around 3% annually [1][45] - **Negotiation Power**: With a stable and experienced management team, the company has strong bargaining power with suppliers and customers, enhancing its competitiveness [1][52] - **Aircraft Asset Management**: The company's strategy of customer diversification, flexible operational adjustments, and active aircraft trading improves fleet utilization and investment returns [1][54] Financial Projections - Revenue is forecasted to grow to USD 2 5 billion, USD 2 68 billion, and USD 2 92 billion for 2024-2026, with net profit expected to reach USD 710 million, USD 770 million, and USD 880 million, respectively [1][71] - EPS is projected at USD 1 02, USD 1 10, and USD 1 27 for 2024-2026, with ROE stabilizing at around 11 4%-12 1% [1][71] Industry Outlook - Global aviation demand is recovering, with 2023 passenger traffic reaching 94 1% of 2019 levels, driving demand for aircraft leasing [61] - Aircraft values and lease rates have rebounded post-pandemic, benefiting lessors like BOC Aviation [63] - A potential decline in interest rates could further enhance the company's profitability by reducing financing costs [64] - Boeing forecasts a demand for 42,595 new aircraft globally over the next 20 years, with China accounting for 8,560 of these, indicating significant growth potential for the leasing industry [66]

Financial Performance - Operating revenue and other income increased by 7% to $2.5 billion[6] - Record net profit after tax reached $764 million, compared to $20 million in 2022[8] - Core net profit after tax was $547 million, excluding the after-tax amount of $217 million from the recovery of Russian aircraft[6] - The company achieved a record net profit of $764 million in 2023, significantly up from $20 million in the previous year, surpassing the 2019 record of $702 million[23] - The net profit after tax for 2023 was $764 million, with a return on equity of 14.0%[44] - Pre-tax profit rose significantly to $861 million in 2023 from $29 million in 2022[86] - Net profit after tax increased to $764 million in 2023, up from $20 million in 2022[88] - The overall cost and expenses decreased by 29.7% to $1.6 billion in 2023, compared to $2.28 billion in 2022, primarily due to lower aircraft impairment and other operational efficiencies[70] Assets and Liabilities - Total assets as of December 31, 2023, amounted to $24.2 billion, a 10% increase from 2022[8] - Total assets grew by 9.5% to $24.2 billion as of December 31, 2023, from $22.1 billion in 2022[90] - Total liabilities increased by 9.2% to $18.4 billion in 2023 from $16.9 billion in 2022[91] - The company raised $4.1 billion in new debt financing, including $2.5 billion in loans and $1.7 billion in bonds[6] - The company increased its debt by $1.4 billion in 2023, with total liabilities rising by $1.6 billion[52] - Loans and borrowings rose by 9.2% from $15.1 billion on December 31, 2022, to $16.5 billion on December 31, 2023, driven by the issuance of $1.7 billion in notes and increased borrowings[99] Fleet and Operations - The fleet utilization rate reached 99% as of December 31, 2023[14] - The company executed a record 348 transactions in 2023, including commitments to purchase 95 aircraft[15] - The order book includes 224 aircraft, with a diverse customer base covering 91 airlines across 45 countries and regions[15] - The company successfully purchased 65 aircraft in 2023, bringing the total fleet to 460 owned and managed aircraft[24] - The average age of the fleet was 4.6 years at the end of 2023, with 77% of the fleet consisting of the latest technology aircraft[25] - The average remaining lease term for the company's aircraft is 8.1 years, with 76% of leases expiring in 2030 or later[39] Revenue Sources - The total operating revenue reached $2.46 billion in 2023, with lease rental income accounting for 78% of this total[34] - Lease rental income increased by 7.1% to $1.91 billion in 2023 from $1.78 billion in 2022, driven by improved aircraft utilization and favorable leasing terms[70] - Financing lease interest income surged by 69.4% to $0.69 billion in 2023 from $0.41 billion in 2022, with a rental yield of 6.6% in 2023 compared to 6.2% in 2022[73] - Other income increased by 220.4% to $0.317 billion in 2023, up from $0.099 billion in 2022, mainly due to insurance claims related to aircraft detained in Russia[78] Dividends and Shareholder Returns - The board proposed a final dividend of $0.2721 per share, with total dividends for 2023 reaching $0.3852 per share, representing 35% of net profit after tax[6] Management and Governance - Significant management changes occurred, with new appointments for CEO and CFO effective January 1, 2024[20] - The company is committed to high standards of corporate governance, adhering to relevant laws and regulations in Hong Kong and Singapore[154] - The board of directors is responsible for strategic leadership and control, ensuring effective oversight of management and compliance with corporate governance practices[162] - The company emphasizes risk management and internal control as part of its corporate governance strategy[163] Corporate Strategy and Future Outlook - The company expects further growth in 2024, driven by the recovery of cross-border travel in the Asia-Pacific region[27] - The company plans to implement cost-cutting measures aimed at reducing operational expenses by 5% in the upcoming year[138] - The company is exploring partnerships with key industry players to drive further growth and innovation[138] Employee and Diversity Initiatives - Female employees represent 50% of the total workforce and 26% of the management team, maintaining a stable gender ratio[170] - The company aims to maintain a female employee ratio of at least 45% in the workforce[170] - The company has adopted a board diversity policy, reviewed in December 2022 and December 2023, to ensure a balanced skill set and diverse perspectives[168]

2024年03月27日 公 司点评 公 买入 / 维持 司 中银航空租赁(02588) 研 究 目标价: 昨收盘:60.15 中银航空租赁 2023 年报点评：机队保持领先，业绩稳健增长 事件：中银航空租赁公布2023年年度报告，报告期内公司实现经营 ◼ 走势比较 收入及其他收入总额24.6亿美元，同比+6.7%；实现税后净利润7.6亿美 元，其中核心税后净利润（剔除滞俄飞机收回款项）为5.5亿美元，同比 20% +3.8%。公司计划派发 0.3 美元/股的末期股利，2023 财年总股息达 0.4 太 10% 美元/股，现金分红比例维持35%。 平 供需缺口推高租赁收益率。需求端，年内全球航空业实现复苏，IATA 0% 洋 (10%)72/3/32 8/6/32 02/8/32 1/11/32 31/1/42 62/3/42 数 供据 给显 端示 ，波20 音23 及年 空客 客运 生量 产同 的比 客+3 机7 同%， 比1 仅2月 +6客 %,运 飞量 机达 交到 付2 量01 较9年 20水 18平 年的 的9 峰8% 值。 证 (20%) 低23%。供需缺口推高飞机估值和租赁费率，报告期内公司单架飞机 ...

Financial Performance - Total operating revenue and other income increased by 7% to $2.461 billion[4] - Record net profit after tax reached $764 million, up from $20 million in 2022, representing a growth of 3,708%[4] - Core net profit after tax was $547 million, excluding the after-tax impact of $217 million from the recovery of Russian aircraft[4] - Earnings per share (EPS) was $1.10, compared to $0.03 in 2022, reflecting a growth of over 100%[5] - The company achieved a record net profit of $764 million in 2023, significantly higher than the $20 million in 2022 and surpassing the previous record of $702 million set in 2019[18] - Pre-tax profit increased significantly from $29 million in 2022 to $861 million in 2023[76] - Net profit after tax rose from $20 million in 2022 to $764 million in 2023[78] - Lease rental income increased by 7.1% to $1.91 billion in 2023 from $1.78 billion in 2022, with a yield of 10.0% compared to 9.2% in the previous year[63] - Financing lease interest income rose by 69.4% to $68.9 million in 2023 from $40.7 million in 2022, with the yield for financing leases at 6.6% in 2023, up from 6.2% in 2022[64] - The net gain from aircraft sales was $77.8 million in 2023, a 21.9% increase from $63.9 million in 2022, attributed to the sale of 20 aircraft in 2023 compared to 17 in 2022[66] Assets and Liabilities - Total assets amounted to $24.2 billion, a 10% increase from $22.1 billion in 2022[5] - Total assets increased by $2.1 billion to $24.2 billion as of December 31, 2023, with aircraft accounting for the largest portion at a net book value of $19.1 billion[41] - Total equity rose by 11% to $5.7 billion as of December 31, 2023[42] - The company’s total liabilities increased by $1.6 billion, with total debt rising by $1.4 billion in 2023[45] - Loans and borrowings increased by 9.2% from $15.1 billion on December 31, 2022, to $16.5 billion on December 31, 2023, primarily due to the issuance of $1.7 billion in notes and an increase of $500 million in borrowings from revolving credit facilities[88] - Total debt increased from $15.2 billion on December 31, 2022, to $16.6 billion on December 31, 2023, with a total capital debt ratio remaining stable at 2.9 times[94] Liquidity and Cash Flow - Cash and cash equivalents stood at $392 million, with total liquidity reaching $5.6 billion[4] - The company maintained strong liquidity with $5.6 billion in total liquidity, including $3.92 million in cash and undrawn committed loan facilities of $5.2 billion[4] - Operating cash flow (net of interest paid) grew by 8% from $1.517 billion in 2022 to $1.643 billion in 2023[93] - The company has $4.1 billion in projected cash outflows for aircraft capital expenditures, with $2.5 billion expected in 2024[104] Fleet and Operations - The fleet comprised 684 aircraft, with a utilization rate of 99% for owned aircraft[8] - The company executed a record 348 transactions in 2023, including commitments to purchase 95 aircraft[8] - The company successfully purchased 65 aircraft in 2023, bringing the total fleet to 460 owned and managed aircraft[19] - The average age of the fleet is 4.6 years, with 77% of the fleet consisting of the latest technology aircraft, up from 71% in 2022[19] - The average remaining lease term for aircraft is 8.1 years, with a significant portion of leases expiring after 2029[33] Corporate Governance - The company is committed to high standards of corporate governance, ethics, transparency, and accountability to enhance shareholder value[137] - The board of directors is responsible for strategic leadership and control, including approving business plans and annual budgets[146] - The company has adopted and complied with the principles of the corporate governance code for the year ending December 31, 2023[137] - The board consists of six non-executive directors, four independent non-executive directors, and two executive directors[148] - The company emphasizes risk management and internal control as part of its corporate governance practices[146] Risk Management - The company has established a risk management and internal control system to achieve business objectives, with the audit committee overseeing its effectiveness[171] - The internal audit department conducts independent reviews of major risk areas and monitors compliance with accounting, financial, and operational procedures[175] - The company evaluates its risk management and internal control systems annually, covering all significant controls, including financial, operational, compliance, and risk management[174] - The board of directors and management are responsible for identifying and analyzing potential risks associated with achieving business goals[172] Environmental and Social Responsibility - The company is committed to reducing direct carbon emissions and achieving carbon neutrality through investments in fuel-efficient aircraft, which constitute 77% of its fleet[57] - The company has a dedicated committee for environmental, social, and governance (ESG) initiatives, overseeing commitments and reporting responsibilities[196] Employee and Management - Employee count as of December 31, 2023, was 198, up from 192 in 2022, reflecting a growth in business operations and management[107] - Personnel expenses for the year ended December 31, 2023, were $6.8 million, representing 2.8% of total operating revenue, compared to $4.9 million or 2.1% in 2022[108] Board Composition and Diversity - As of December 31, 2023, the number of female directors reached three, exceeding the board's gender diversity target[152] - The company maintains a balanced workforce with a gender ratio of 50% female employees, with women comprising 26% of the management team[152] - The board's diversity policy was reviewed in December 2023, emphasizing the importance of skills, experience, and diverse perspectives in board appointments[151]

[Financial Overview](index=4&type=section&id=Financial%20Overview) The company achieved a turnaround in H1 2023, reporting a net profit after tax of **$262 million** compared to a **$313 million** net loss in the prior period, supported by a **4%** asset growth to **$22.9 billion** and strong liquidity Key Financial Indicators for H1 2023 | Metric | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Total Operating and Other Income | $1,061 million | $1,196 million | | Net Profit/(Loss) After Tax | $262 million | ($313) million | | Core Net Profit After Tax | $262 million | $206 million | | Earnings/(Loss) Per Share | $0.38 | ($0.45) | | Core Earnings Per Share | $0.38 | $0.30 | | Interim Dividend | $0.1131/share | $0.0889/share | - As of June 30, 2023, total company assets reached **$22.9 billion**, a **4%** increase from the end of 2022[7](index=7&type=chunk) - The company maintains strong liquidity, with **$547 million** in cash and short-term deposits and **$5.2 billion** in undrawn committed loan facilities at period-end[7](index=7&type=chunk) [Fleet and Operations Overview](index=6&type=section&id=Fleet%20and%20Operations%20Overview) As of June 30, 2023, the company's fleet (including orders) totaled **652 aircraft**, with **404 owned aircraft** and **213 on order**, demonstrating strong H1 operational performance with **99%** aircraft utilization and a **101.8%** airline customer cash collection rate Fleet Composition (As of June 30, 2023) | Category | Quantity | | :--- | :--- | | Owned Aircraft | 404 aircraft | | Managed Aircraft | 35 aircraft | | Ordered Aircraft | 213 aircraft | | **Total** | **652 aircraft** | - The owned and managed fleet serves **91 airlines** across **42 countries and regions**, indicating broad geographical diversification[9](index=9&type=chunk) - Operational metrics showed excellent performance, with owned aircraft utilization at **99%** and airline customer cash collection rate improving from **96.9%** in the prior-year period to **101.8%**[9](index=9&type=chunk) [Half-Year Business Review](index=12&type=section&id=Half-Year%20Business%20Review) In H1 2023, the company's business resumed growth, achieving a net profit after tax of **$262 million** and successfully turning around, driven by strong global passenger traffic recovery, increased demand for new aircraft, and a **9%** increase in operating income (excluding non-recurring items) - Strong global passenger traffic recovery was a key driver of business growth, with H1 2023 passenger traffic increasing **47%** year-on-year and load factors reaching 2019 levels, boosting demand for new aircraft[25](index=25&type=chunk) - Operating efficiency significantly improved, with off-lease aircraft reducing from **17** in the prior-year period to just **2**, demonstrating growing airline demand[27](index=27&type=chunk) - Excluding non-recurring income from lease terminations in H1 2022, total operating and other income increased **9%** year-on-year[27](index=27&type=chunk) - The company demonstrated strong capital market performance, issuing **$1 billion** in bonds in H1 with oversubscription and achieving the narrowest spread among global lessors since January 2022[28](index=28&type=chunk) [Business Overview](index=15&type=section&id=Business%20Overview) BOC Aviation is a leading global aircraft operating lessor, Asia's largest, generating revenue from USD-denominated long-term leases, supported by investment-grade credit ratings and Bank of China, ensuring low funding costs and **$5.7 billion** in available liquidity - The company is positioned as a leading global aircraft operating lessor, headquartered in Asia with extensive international management experience[29](index=29&type=chunk) - As of June 30, 2023, the company's fleet (including managed and ordered aircraft) serves **91 customers** in **42 countries and regions**, with **213 new technology aircraft** on order for delivery through end-2029[29](index=29&type=chunk) - The company holds investment-grade credit ratings of Fitch and S&P A-, with strong support from Bank of China, including a **$3.5 billion** undrawn revolving credit facility, ensuring low-cost and diversified funding channels[29](index=29&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) [Income Statement Analysis](index=16&type=section&id=Income%20Statement%20Analysis) In H1 2023, the company achieved a net profit after tax of **$262 million**, a **27.2%** increase from prior-year adjusted core profit, driven by a **7.2%** rise in lease rental income to **$940 million**, partially offset by a **29.7%** increase in finance expenses Income Statement Item Changes (Thousand USD) | Item | H1 2023 | H1 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Lease Rental Income | 940,081 | 876,788 | 7.2% | | Total Operating and Other Income | 1,060,753 | 1,196,140 | (11.3)% | | Aircraft Impairment | 3,300 | 850,571 | (99.6)% | | Finance Expenses | 296,462 | 228,548 | 29.7% | | Net Profit/(Loss) After Tax | 261,555 | (312,548) | 183.7% | - Total operating and other income decreased **11.3%**, primarily due to a **$223 million** one-off income from Russian lease terminations in the prior-year period; excluding this impact, total income increased **9.0%**[32](index=32&type=chunk) - Finance expenses significantly increased **29.7%**, mainly due to the average cost of funds rising from **2.9%** in the prior-year period to **3.9%**[27](index=27&type=chunk)[41](index=41&type=chunk) [Statement of Financial Position Analysis](index=20&type=section&id=Statement%20of%20Financial%20Position%20Analysis) As of June 30, 2023, total assets increased **3.8%** to **$22.9 billion** and total equity grew **3.0%** to **$5.4 billion**, driven by a **2.4%** rise in aircraft assets, while trade receivables decreased **26.3%** and loans increased **4.3%** to **$15.8 billion** Statement of Financial Position Item Changes (Thousand USD) | Item | June 30, 2023 | December 31, 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 21,115,218 | 20,628,570 | 2.4% | | Trade Receivables | 120,348 | 163,267 | (26.3)% | | Cash and Short-Term Deposits | 547,416 | 396,866 | 37.9% | | Loans and Borrowings | 15,779,389 | 15,121,665 | 4.3% | | Net Assets | 5,357,605 | 5,202,099 | 3.0% | - Trade receivables significantly decreased **26.3%**, primarily due to improved collections from lessees[51](index=51&type=chunk) - The increase in total equity is mainly attributable to the profit recorded during the period, partially offset by **$123 million** in dividend payments[58](index=58&type=chunk) [Other Information](index=23&type=section&id=Other%20Information) This section details the company's liquidity, debt structure, future investment plans, and human resources, highlighting ample liquidity, a stable debt-to-capital ratio of **3.0 times** with predominantly unsecured debt, **$11 billion** in future capital expenditure commitments, and foreign exchange risk management [Liquidity and Funding Sources](index=23&type=section&id=Liquidity%20and%20Funding%20Sources) The company's liquidity sources include operating cash flow, aircraft sales, and borrowings, with H1 2023 operating cash flow (net of interest) at **$721 million**, **$1.7 billion** in new funding raised, and **$547 million** in cash plus **$5.2 billion** in undrawn committed loan facilities - Operating cash flow (net of interest) for H1 2023 was **$721 million**, consistent with the prior-year period[60](index=60&type=chunk) - A total of **$1.7 billion** in new funds was raised in H1 through note issuances and new bank financings[60](index=60&type=chunk) [Debt](index=24&type=section&id=Debt) As of June 30, 2023, the company's total debt-to-capital ratio was **3.0 times**, a slight increase from **2.9 times**, with total debt at **$15.86 billion**, predominantly unsecured, and **$1.4 billion** due within the next year Debt-to-Capital Ratio | Metric | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Debt (million USD) | 15,861 | 15,197 | | Total Equity (million USD) | 5,358 | 5,202 | | Total Debt-to-Capital Ratio (times) | 3.0 | 2.9 | - The debt structure is healthy, with secured debt accounting for less than **1%** of total debt, and the net book value of unencumbered aircraft reaching **$18.9 billion**[64](index=64&type=chunk)[65](index=65&type=chunk) [Foreign Exchange Risk](index=26&type=section&id=Foreign%20Exchange%20Risk) The company's transactional currency exposure primarily arises from non-USD denominated borrowings, which are converted to USD-denominated through cross-currency interest rate swap contracts to eliminate foreign exchange risk - The company uses cross-currency interest rate swap contracts to hedge all non-USD denominated financial liabilities, eliminating foreign currency exposure[67](index=67&type=chunk) [Future Significant Investment Plans](index=27&type=section&id=Future%20Significant%20Investment%20Plans) As of June 30, 2023, the company's total estimated cash outflows for aircraft capital expenditure commitments amounted to **$11 billion**, primarily concentrated in 2026 and beyond (**$7.3 billion**), indicating long-term fleet expansion plans Estimated Aircraft Capital Expenditure Commitments (Billion USD) | Period | Amount | | :--- | :--- | | H2 2023 | 1.0 | | 2024 | 1.8 | | 2025 | 0.9 | | 2026 and Beyond | 7.3 | | **Total** | **11.0** | [Funding Channels](index=27&type=section&id=Funding%20Channels) The company's aircraft acquisition commitments will be funded through diversified channels including operating cash flow, note issuances, bank financing, and aircraft sales, with strong funding access supported by A- investment-grade credit ratings and **48 financial institutions**, primarily through unsecured notes and loan facilities - The company holds strong investment-grade credit ratings of Fitch and S&P A-, and benefits from ongoing support from **48 financial institutions**[69](index=69&type=chunk) - As of June 30, 2023, the company had **$5.2 billion** in undrawn committed unsecured loan facilities, including **$3.5 billion** from Bank of China[69](index=69&type=chunk) [Employees](index=28&type=section&id=Employees) As of June 30, 2023, the company had **195 employees**, offering comprehensive benefits and incentive programs, including short-term cash incentives and long-term equity-based plans (Restricted Share Units) to attract and retain talent, with personnel expenses representing a low **2.4%** of total revenue - As of June 30, 2023, the number of employees was **195**, an increase from **187** in the prior-year period[70](index=70&type=chunk) - Employee incentive plans include short-term cash bonuses and long-term incentives based on Restricted Share Units (RSUs)[70](index=70&type=chunk) [General Information](index=29&type=section&id=General%20Information) [Dividend Policy and Interim Dividend](index=29&type=section&id=Dividend%20Policy%20and%20Interim%20Dividend) The company's dividend policy aims to distribute up to **35%** of full-year net profit after tax, with the Board declaring an interim dividend of **$0.1131 per share** for 2023, representing **30%** of net profit after tax, payable on October 12, 2023 - The company's dividend policy targets a payout of up to **35%** of annual net profit after tax[72](index=72&type=chunk) - The Board approved an interim dividend of **$0.1131 per share** for 2023, a **27%** increase from the prior-year period[3](index=3&type=chunk)[73](index=73&type=chunk) [Significant Equity Interests](index=30&type=section&id=Significant%20Equity%20Interests) As of June 30, 2023, the company's primary controlling shareholder is Sky Splendor Limited, through which Bank of China and Central Huijin Investment Ltd indirectly hold **70%** of the company's shares, with FIL Limited holding an additional **9.99%** Major Shareholder Holdings | Shareholder Name | Capacity | Shareholding (%) | | :--- | :--- | :--- | | Central Huijin Investment Ltd | Interest in Controlled Corporation | 70% | | Bank of China | Interest in Controlled Corporation | 70% | | Sky Splendor Limited | Beneficial Owner | 70% | | FIL Limited | Beneficial Owner/Interest in Controlled Corporation | 9.99% | [Restricted Share Unit Long-Term Incentive Plan](index=32&type=section&id=Restricted%20Share%20Unit%20Long-Term%20Incentive%20Plan) The company operates two Restricted Share Unit (RSU) plans to incentivize employees: one for FY2017-2021 awards and a second adopted in 2023 for FY2022-2025 awards, both implemented through trustee purchases of existing shares in the secondary market without issuing new shares, with new awards granted in H1 2023 - The company has two parallel Restricted Share Unit (RSU) plans covering awards for FY2017-2021 and FY2022-2025, respectively[82](index=82&type=chunk) - On June 9, 2023, new awards were granted under the RSU plan, with General Manager Mr. Robert James MARTIN receiving **144,375 units** and Deputy Chairman Ms. Zhang Xiaolu receiving **77,190 units**[84](index=84&type=chunk)[85](index=85&type=chunk) [Corporate Information](index=36&type=section&id=Corporate%20Information) [Corporate Information](index=36&type=section&id=Corporate%20Information) This section provides core corporate information, including Board members, senior management, principal place of business, registered office, independent auditor (PwC), credit ratings (Fitch A-, S&P A-), and Hong Kong Stock Exchange stock code (2588) - The Chairman is Mr. Liu Jin, and the Managing Director and Chief Executive Officer is Mr. Robert James MARTIN[96](index=96&type=chunk)[97](index=97&type=chunk) - The company's credit ratings are Fitch A- and S&P Global Ratings A-[97](index=97&type=chunk) - The company is listed on the Hong Kong Stock Exchange with stock code **2588**[97](index=97&type=chunk) [Appendix – Interim Condensed Consolidated Financial Statements](index=39&type=section&id=Appendix%20%E2%80%93%20Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Income Statement](index=41&type=section&id=Interim%20Condensed%20Consolidated%20Income%20Statement) In H1 2023, the company reported a pre-tax profit of **$295 million** and a net profit after tax of **$262 million**, with basic and diluted earnings per share both at **$0.38**, marking a significant turnaround from the **$313 million** net loss in H1 2022 due to an **$804 million** impairment of aircraft in Russia Income Statement Summary (Thousand USD) | Item | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Operating and Other Income | 1,060,753 | 1,196,140 | | Profit/(Loss) Before Tax | 295,275 | (346,865) | | Net Profit/(Loss) for the Period | 261,555 | (312,548) | | Basic Earnings/(Loss) Per Share (USD) | 0.38 | (0.45) | [Interim Condensed Consolidated Statement of Financial Position](index=43&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, total company assets were **$22.918 billion**, total liabilities were **$17.560 billion**, and net assets (total equity) were **$5.358 billion**, with non-current assets, primarily **$21.115 billion** in property, plant, and equipment (aircraft), constituting the majority of total assets Statement of Financial Position Summary (Thousand USD) | Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Assets | 22,917,534 | 22,071,375 | | Total Liabilities | 17,559,929 | 16,869,276 | | Net Assets | 5,357,605 | 5,202,099 | [Interim Condensed Consolidated Cash Flow Statement](index=46&type=section&id=Interim%20Condensed%20Consolidated%20Cash%20Flow%20Statement) In H1 2023, the company generated **$1.024 billion** in net cash from operating activities, demonstrating strong cash generation, with net cash outflow from investing activities of **$1.094 billion** primarily for aircraft purchases, and net cash inflow from financing activities of **$217 million**, increasing period-end cash and cash equivalents to **$539 million** Cash Flow Statement Summary (Thousand USD) | Item | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 1,024,013 | 946,169 | | Net Cash Flows Used in Investing Activities | (1,093,657) | (109,781) | | Net Cash Flows From/(Used in) Financing Activities | 216,930 | (870,465) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 147,286 | (34,077) | [Notes to the Financial Statements (Selected)](index=48&type=section&id=Notes%20to%20the%20Financial%20Statements%20(Selected)) The notes to the financial statements provide detailed explanations and supplementary information for the primary financial statements, with key notes including Property, Plant and Equipment (Note 9) detailing aircraft asset movements and impairments, Loans and Borrowings (Note 16) disclosing debt composition, maturities, and interest rate structures, and Commitments (Note 22) revealing significant future commitments for operating leases, finance leases, and capital expenditures, including **$11 billion** in future aircraft purchase capital expenditure commitments - As of June 30, 2023, the company had committed to purchase multiple aircraft, with future committed capital expenditures totaling approximately **$11 billion** through end-2029[178](index=178&type=chunk) - Under irrevocable operating leases, the company's existing aircraft have future minimum lease receivables totaling **$14.237 billion**[172](index=172&type=chunk)[173](index=173&type=chunk) - The company has filed formal claims with insurers and initiated legal proceedings in the Irish High Court regarding **17 aircraft** stranded in Russia[132](index=132&type=chunk)