Financial Performance and Growth - The company achieved steady growth in revenue and profitability in 2023, with financial business remaining stable and asset quality improving[10] - The company's total assets reached RMB 3,514.83 billion at the end of 2023, a year-on-year increase of 1.29%, with annual revenue of RMB 379.60 billion, up 3.76% year-on-year, and net profit attributable to ordinary shareholders of RMB 6.193 billion, a year-on-year increase of 1.04%[13] - Total revenue for 2023 reached RMB 37,959,798 thousand, a 3.8% increase from RMB 36,585,722 thousand in 2022[19] - Net profit attributable to ordinary shareholders was RMB 6,192,972 thousand in 2023, slightly up from RMB 6,128,954 thousand in 2022[19] - The company's average return on equity was 12.99% in 2023, with a proposed dividend of HKD 0.50 per share[13] - The company's diluted earnings per share were RMB 1.33 in 2023, with an average return on assets of 1.98% and an average return on equity of 12.99%[17] - The company's asset-liability ratio decreased from 84.89% in 2022 to 83.62% in 2023, with net assets per share increasing from RMB 10.49 in 2022 to RMB 11.61 in 2023[18] - The group's revenue for 2023 reached RMB 37,959.798 million, a 3.76% increase compared to the previous year[36][38] - Net profit attributable to ordinary shareholders of the company for 2023 was RMB 6,192.972 million, a 1.04% increase compared to the previous year[36] - The company's total assets increased by 1.29% to RMB 351.48 billion as of December 31, 2023, compared to RMB 346.99 billion in the previous year[80] - The company's cash and cash equivalents increased significantly by 18.54% to RMB 18.85 billion as of December 31, 2023[80] - The company's total liabilities decreased by RMB 640.439 million (0.22%) to RMB 293,913.636 million as of December 31, 2023, with interest-bearing bank and other financing accounting for 86.98% of total liabilities, an increase of 1.65 percentage points compared to the previous year[141][142] - The company's property, plant, and equipment balance was RMB 23,513.055 million, including RMB 18.2 billion for equipment operations and RMB 3.3 billion for hospital buildings and medical equipment[139] - The company's investment in joint ventures and associates amounted to RMB 9,105.237 million, including RMB 5,093.862 million in equity investments in provincial asset management companies[139] - The company's financial assets measured at fair value through profit or loss totaled RMB 8,841.595 million, including RMB 3.22 billion in interest-bearing assets and RMB 2.85 billion in other debt investments[140] - The company's total assets under asset-backed securities/notes decreased by 71.83% to RMB 1,649 million as of December 31, 2023, compared to RMB 5,853 million in the previous year[137] - The company's self-held portion of asset-backed securities/notes decreased by 58.55% to RMB 369.172 million as of December 31, 2023, compared to RMB 890.572 million in the previous year[137][138] - The company's deferred tax assets amounted to RMB 6,052.352 million, primarily due to timing differences between accounting and tax treatments[139] - The company's prepayments and other receivables stood at RMB 4,374.919 million, mainly consisting of prepayments to suppliers for machinery and equipment[139] - The company's restricted deposits amounted to RMB 3,149.062 million as of December 31, 2023[139] - The total interest-bearing bank and other financing of the company amounted to RMB 255,636,145 thousand as of December 31, 2023, an increase of 1.71% compared to the end of the previous year[144] - The proportion of current interest-bearing bank and other financing increased to 51.79% as of December 31, 2023, up from 49.12% at the end of the previous year, mainly due to a reduction in the issuance scale of long-term bonds overseas[145][146] - The proportion of unsecured interest-bearing bank and other financing decreased to 82.13% as of December 31, 2023, down from 84.95% at the end of the previous year, as the company obtained more low-cost funds through asset pledges[147] - Bank loans accounted for 60.87% of the total interest-bearing bank and other financing as of December 31, 2023, an increase of 15.91% compared to the end of the previous year, reflecting the company's deepening cooperation with banks[149] - Domestic financing accounted for 84.59% of the total interest-bearing bank and other financing as of December 31, 2023, an increase of 3.73% compared to the end of the previous year, as the company balanced domestic and overseas financing channels[150][151] - RMB-denominated financing accounted for 81.35% of the total interest-bearing bank and other financing as of December 31, 2023, an increase of 4.56% compared to the end of the previous year, as the company actively promoted RMB financing both domestically and internationally[152][153] - Indirect financing accounted for 69.67% of the total interest-bearing bank and other financing as of December 31, 2023, an increase of 15.73% compared to the end of the previous year, as the company optimized its financing structure and increased indirect financing[155] - The total equity of the company amounted to RMB 57,569,600 thousand as of December 31, 2023, an increase of 9.78% compared to the end of the previous year, driven by steady profit growth and the successful listing of Hongxin Construction[156] - Total equity increased by 9.78% to RMB 57.57 billion in 2023, compared to RMB 52.44 billion in 2022[157] - The company's ordinary shareholders' equity rose by 10.72% to RMB 50.10 billion in 2023, up from RMB 45.25 billion in 2022[157] - Non-controlling interests surged by 43.39% to RMB 5.90 billion in 2023, compared to RMB 4.11 billion in 2022[157] - Perpetual securities decreased by 48.91% to RMB 1.57 billion in 2023, down from RMB 3.08 billion in 2022[157] - The company proposed a special dividend in the form of a distribution of approximately 160 million Hongxin Construction shares, representing about 5% of the total issued shares of Hongxin Construction as of December 6, 2023[160] - The total dividend payable for the special dividend in kind was approximately RMB 664 million, based on the closing price of Hongxin Construction shares on December 29, 2023[160] - The listing of Hongxin Construction on the Hong Kong Stock Exchange on May 25, 2023, resulted in an increase of approximately RMB 870 million in the equity attributable to ordinary shareholders of the company[161] - The company updated its medium-term note and perpetual securities program on July 24, 2023, allowing for the issuance of up to USD 4 billion in notes and/or perpetual securities[165] - The company issued and outstanding convertible bonds as of December 31, 2023, include a $300 million bond due in 2025 with a 2.5% annual interest rate, and a $250 million zero-coupon bond due in 2026[166][167] - The net proceeds from the $300 million bond issuance were approximately $296.6 million, with a net conversion price of approximately HK$8.24 per share[166] - The net proceeds from the $250 million bond issuance were approximately $246 million, with a net conversion price of approximately HK$10.01 per share[167] - As of December 31, 2023, the outstanding principal amount of the $300 million bond was $290 million after redeeming $10 million in July 2023[166] - The outstanding principal amount of the $250 million bond remained at $250 million as of December 31, 2023[167] - If all convertible bonds were fully converted, the company would issue 569,336,712 shares, representing approximately 13.19% of the issued share capital as of December 31, 2023[170] - The conversion of all convertible bonds would dilute the shareholding percentage of major shareholders, with China National Chemical Corporation's stake decreasing from 21.31% to 18.83%[171] - The company's credit ratings remained unchanged in 2023, and it has sufficient cash flow and bank credit lines to fully repay the convertible bonds at maturity[173] - The implied internal rate of return for the convertible bonds issued on July 8, 2020, and June 15, 2021, indicates that bondholders will receive equally favorable economic returns whether they choose to convert or redeem the bonds by the end of 2023 to 2025. The corresponding stock prices are HKD 6.59 for 2023 and 2024, and HKD 8.94, 9.12, and 9.30 for 2023, 2024, and 2025, respectively[174] - The conversion prices for the convertible bonds issued in July 2020 and June 2021 were adjusted to HKD 6.48 and HKD 8.35 per share, respectively, due to the payment of special dividends on January 22, 2024. If all conversion rights are exercised, the company will issue 579,227,090 shares[175] - The company's asset-liability ratio was 83.62% as of December 31, 2023, compared to 84.89% in the previous year, reflecting a slight improvement in capital management[177][178] - The risk asset-to-equity ratios for the company's financing leasing subsidiaries were 4.58, 3.49, 1.57, and 4.34 as of December 31, 2023, all of which comply with regulatory requirements[179][180][181][182] - The company's capital expenditure for 2023 was RMB 2,880.915 million, primarily used for property, plant, and equipment additions, as well as external equity investments[183] Credit Ratings and ESG Performance - Far East Horizon's credit rating was confirmed as "BBB-" by S&P Global Ratings with a "stable" outlook, and its standalone credit profile (SACP) was upgraded to "bbb-"[10] - The company received an "A" rating from MSCI for ESG for two consecutive years, with its sustainable financing framework achieving the highest score among Asian financial institutions by Moody's and Fitch[10] Industrial Operations and Market Expansion - Far East Horizon's industrial operations saw breakthroughs, with Hongxin Construction successfully spinning off and listing, and continued expansion in overseas markets[10] - The company's healthcare business, Hongxin Health, returned to normal operating conditions, with operational efficiency continuously improving[10] - Far East Horizon operates in multiple sectors including healthcare, tourism, construction, machinery, chemicals, electronics, consumer goods, logistics, and urban utilities[7] - The company has established a nationwide service network with offices in major cities such as Beijing, Shanghai, Shenzhen, and Chengdu[8] - The company's headquarters is located in Hong Kong, with business operation centers in Shanghai, Tianjin, and Guangzhou[8] - Far East Horizon was listed on the Hong Kong Stock Exchange on March 30, 2011, under the stock code 03360[8] - Far East Horizon has been recognized in the Fortune China 500 and Forbes Global 2000 rankings[7] - The industrial operation segment achieved a total revenue of RMB 14.739 billion in 2023, a year-on-year increase of 11.38%, with its revenue contribution ratio rising from 36.02% to 38.68%[12] - Hongxin Jianfa, a leading equipment operation service provider in China, expanded its overseas market and increased its total revenue to RMB 9.611 billion in 2023, a year-on-year growth of 22.00%, with adjusted annual profit reaching RMB 1.043 billion, up 10.65% year-on-year[12] - Hongxin Jianfa's aerial work platform management scale reached 177,600 units by the end of 2023, ranking first in Asia and top three globally, with material asset management scale of approximately 2.28 million tons, maintaining domestic leadership[12] - Hongxin Health achieved a total revenue of RMB 4.238 billion in 2023, a year-on-year increase of 15.53%, with annual profit surging 252.75% year-on-year to RMB 172 million[12] - The company expanded its overseas market with new outlets in Malaysia and Indonesia, steadily advancing its international business[33] - The company's financial services (interest income) increased by 3.64% to RMB 22,467.103 million, while consulting services (fee income) decreased by 50.82% to RMB 896.331 million[39][40] - Industrial operations revenue increased by 11.38% to RMB 14.739 billion, with Hongxin Construction contributing RMB 9.611 billion (up 22.00%) and Hongxin Health contributing RMB 4.238 billion (up 15.53%)[41] - Non-leasing business accounted for 46.51% of total revenue (pre-tax), with new business directions like inclusive finance and commercial factoring contributing 5.48% of interest income[41] - Interest income from financial services increased by 3.64% to RMB 22.467 billion, accounting for 58.97% of total revenue (pre-tax)[42] - The average yield on interest-earning assets rose to 8.24% in 2023, up 0.24 percentage points from 8.00% in 2022[46] - Interest income from new business directions (inclusive finance, commercial factoring, and asset business) increased by 12.09% to RMB 2.087 billion, with an average yield showing steady growth[44] - Service fee income from consulting services decreased by 50.82% to RMB 896.331 million, accounting for 2.35% of total revenue (pre-tax)[48] - Sales costs increased by 10.10% to RMB 19.959 billion, with financial and consulting division costs rising by 10.82% to RMB 9.982 billion[52] - Hongxin Construction's operating costs increased by 23.28% to RMB 5.849 billion, while Hongxin Health's operating costs rose by 13.13% to RMB 3.473 billion[52] - Financial and consulting division costs increased by 10.82% to RMB 9,982,081 thousand in 2023, accounting for 50.01% of total sales costs[54][57] - Industrial operations division costs rose by 9.39% to RMB 9,976,734 thousand in 2023, with equipment operation costs surging 23.28% to RMB 5,849,180 thousand[54][59] - The company's gross profit decreased by 2.48% to RMB 18,000,983 thousand in 2023, with gross margin dropping from 50.45% to 47.42%[60] - Net interest income declined by 1.46% to RMB 12,485,022 thousand in 2023, while net interest spread increased by 4 basis points to 3.98%[62][64] - Industrial operations division gross profit grew 15.80% to RMB 4,762,537 thousand in 2023, with hospital operations gross profit surging 27.83% to RMB 765,180 thousand[65] - The company's average cost rate for interest-bearing liabilities increased to 4.26% in 2023, up from 4.06% in 2022[56][57] - Interest expense rose 10.82% to RMB 9,982,081 thousand in 2023, outpacing the 3.64% growth in interest income[62] - Equipment operation gross profit increased 20.06% to RMB 3,761,401 thousand in 2023, accounting for 78.98% of industrial operations gross profit[65] - Other income/earnings decreased by 21.55% to RMB 1,559,591 thousand in 2023, with gains from equity and debt investments surging 163.97% to RMB 507,929 thousand[66] - The company's average balance of interest-bearing liabilities increased to RMB 234,089,521 thousand in 2023, up from RMB 221,672,148 thousand in 2022[56] - Government subsidies for the period amounted to approximately RMB 160 million, including VAT deduction benefits, enterprise development subsidies, and government support funds[67] - Sales and administrative expenses increased by 19.59% to RMB 8,121,968 thousand, driven by market expansion strategies[68] - Other expenses decreased by 86.43% to RMB 55,090 thousand, with significant reductions in exchange losses and bank fees[69] - Financial costs decreased slightly by 1.59% to RMB 1,037,956 thousand, primarily related to financing costs for the industrial operations division[70] - Pre-provision profit decreased by 14.66% to RMB 10,614,851 thousand, impacted by rising financing costs and reduced gains from off-balance sheet assets[71] - Asset provisions decreased by 91.05% to RMB 189,591 thousand, with significant reversals in fixed asset provisions due to improved market conditions[72] - Income tax expenses decreased by 5.66% to RMB 3,508,237 thousand, mainly due to a reduction in cross-border withholding taxes[74] - Net profit attributable to ordinary shareholders increased by 1.04% to RMB 6,192,972 thousand, with basic earnings per share rising by 0.68% to RMB 1.47[75][76] - Total assets increased by 1.29% to RMB 351,483,236 thousand, while interest-earning assets decreased by 0.56% to RMB 269,084,739 thousand[79] - The company's total assets increased by 1.29% to RMB 351.48

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative increase of over 15% compared to the CSI 300 index in the next six months [1][6]. Core Insights - The company reported a revenue of 37.96 billion yuan for 2023, a year-on-year increase of 3.76%, and a net profit attributable to shareholders of 6.19 billion yuan, up 1.04% year-on-year [2][4]. - The financial segment showed stability, while new business expansions helped mitigate declines in consulting revenue, which fell by 50.82% year-on-year [2]. - The company is focusing on expanding its inclusive finance, commercial factoring, and asset management businesses, which contributed 2.09 billion yuan in interest income, a 12.09% increase year-on-year [2]. - The average balance of interest-earning assets was 271.02 billion yuan, a 0.67% increase year-on-year, while the average balance of interest-bearing liabilities rose by 5.60% to 234.09 billion yuan [2]. - The company maintained strong pricing power, with the yield on interest-earning assets increasing by 24 basis points to 8.24%, supporting a 3.64% rise in interest income to 22.47 billion yuan [2]. - The company announced a special dividend and plans to distribute a cash dividend of 0.50 HKD per share, maintaining a payout ratio above 30%, resulting in a dividend yield of 8.24% based on the closing price of 6.07 HKD [2][4]. Financial Projections - Revenue projections for 2024-2026 are 41.23 billion yuan, 43.96 billion yuan, and 46.35 billion yuan, with growth rates of 8.63%, 6.61%, and 5.43% respectively [4]. - Net profit projections for the same period are 6.78 billion yuan, 7.30 billion yuan, and 7.63 billion yuan, with growth rates of 9.53%, 7.55%, and 4.56% respectively [4]. - The diluted earnings per share (EPS) are expected to be 1.57, 1.69, and 1.77 yuan for 2024, 2025, and 2026, respectively, with corresponding price-to-earnings (PE) ratios of 3.55, 3.30, and 3.16 [4].

股 票 研 究 [Table_industryInfo] 综合金融 [ Table_Main[远I Tnaf 东bol]e 宏_Ti信tle]（ 3360） [评Tab级le_：Inv est] 增持 当前价格（港元）： 6.35 产业运营发力推动业绩实现跨周期增长 2024.03.14 海 ——远东宏信2023 年年报点评 [ 交Ta易bl数e_M据a rket] 外 刘欣琦(分析师) 谢雨晟(分析师) 52周内股价区间（港元） 5.01-7.32 当前股本（百万股） 4,315 公 021-38676647 021-38674943 当前市值（百万港元） 27,401 司 liuxinqi@gtjas.com Xieyusheng@gtjas.com 证书编号 S0880515050001 S0880521120003 （ [ Table_PicQuote] 中 本报告导读： 52周内股价走势图 国 公司2023年营收同比3.76%，主要得益于产业运营较快增长；归母净利润同比1.04%， 远东宏信 恒生指数 香 符合预期，维持“增持”评级，维持目标价11.96港元。 7% 摘要： 港 1% [T abl ...

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 7.9 HKD per share based on a 5x PE valuation for 2024 [4][2]. Core Insights - The company reported a slight increase in revenue for 2023, reaching 37.96 billion CNY, up 3.76% year-on-year, while net profit attributable to shareholders was 6.193 billion CNY, reflecting a 1.04% growth [6][2]. - The financial consulting segment has adopted a more cautious approach to asset allocation, with a significant reduction in the proportion of urban public utilities, which decreased from 50.97% in 2022 to 39.82% in 2023 [6][8]. - The industrial operations segment showed robust growth, with revenue increasing by 11.38% to 14.739 billion CNY, driven by strong performance in construction and health sectors [10][6]. Summary by Sections Financial Performance - In 2023, the company’s total interest-earning assets amounted to 269.085 billion CNY, a slight decrease of 0.56% year-on-year [8]. - The net interest margin and non-performing loan ratio for 2023 were 3.98% and 1.04%, respectively, indicating stable core metrics despite a cautious asset allocation strategy [9][6]. - The average cost of liabilities increased from 4.06% in 2022 to 4.26% in 2023, influenced by overseas borrowing costs [9][6]. Revenue Breakdown - The financial and consulting segment accounted for 61.32% of total revenue, a decrease of 0.58% from the previous year, while the industrial operations segment's revenue grew significantly [6][10]. - The industrial operations segment's revenue was 14.739 billion CNY, with notable contributions from Hongxin Jianda and Hongxin Health, which grew by 22.00% and 15.53%, respectively [10][6]. Future Projections - For 2024, the company is expected to generate revenue of 39.569 billion CNY, representing a growth of 4.24%, with net profit projected at 6.333 billion CNY, a 2.26% increase [2][3]. - The earnings per share (EPS) for 2024 is estimated to be 1.47 CNY, with a historical PE average of 5-5.5x over the past five years [2][3].

Financial Performance - Far East Horizon Limited's total revenue for the fiscal year ending December 31, 2023, reached RMB 50.2 billion, representing a year-on-year growth of 12.5%[1] - The company's net profit attributable to shareholders increased by 8.7% to RMB 8.9 billion in 2023[1] - Total revenue for 2023 reached RMB 37.96 billion, a year-on-year increase of 3.76%[13] - Net profit attributable to ordinary shareholders for 2023 was RMB 6.19 billion, up 1.04% year-on-year[13] - The company's average return on equity stood at 12.99% for 2023[13] - The company's return on average equity (ROAE) stood at 15.6% for the fiscal year 2023[1] - Total revenue for 2023 reached RMB 37,959,798 thousand, a 3.8% increase from RMB 36,585,722 thousand in 2022[19] - Net profit attributable to ordinary shareholders was RMB 6,192,972 thousand in 2023, a 1.0% increase from RMB 6,128,954 thousand in 2022[19] - Basic earnings per share (EPS) were RMB 1.47 in 2023, up from RMB 1.46 in 2022[19] - The company's net profit attributable to ordinary shareholders increased by 1.04% to RMB 6,192.972 million[75] - Basic earnings per share increased by 0.68% to RMB 1.47[76] Asset and Liability Management - Far East Horizon's total assets grew by 10.3% to RMB 450.6 billion as of December 31, 2023[1] - The company's total assets amounted to RMB 351.48 billion at the end of 2023, a 1.29% increase from the previous year[13] - Total assets amounted to RMB 351,483,236 thousand in 2023, up 1.3% from RMB 346,995,497 thousand in 2022[20] - The company's total assets increased by 1.29% to RMB 351.48 billion as of December 31, 2023, compared to RMB 346.99 billion in the previous year[80] - The company's total liabilities as of December 31, 2023, were RMB 293,913,636 thousand, a decrease of 0.22% compared to the previous year[141] - The company's asset-liability ratio was 83.62% as of December 31, 2023, compared to 84.89% at the end of 2022, reflecting a slight improvement in capital management[177][178] - The company's cash and cash equivalents increased significantly by 18.54% to RMB 18.85 billion as of December 31, 2023[80] - The company's cash and cash equivalents as of December 31, 2023, were RMB 18,852,540 thousand, ensuring liquidity safety and supporting business development[139] - The company's total assets under asset-backed securities/notes decreased by 71.83% to RMB 1,649 million as of December 31, 2023, compared to RMB 5,853 million in the previous year[137] - The company's self-held portion of asset-backed securities/notes decreased by 58.55% to RMB 369,172 thousand as of December 31, 2023, compared to RMB 890,572 thousand in the previous year[137] Loan and Credit Quality - The company's loan balance increased by 9.8% to RMB 320.4 billion in 2023[1] - Far East Horizon's non-performing loan ratio decreased to 1.2% in 2023, down from 1.5% in the previous year[1] - The non-performing asset ratio decreased to 1.04%, with the overdue interest-bearing assets ratio for over 30 days remaining at 0.91%[11] - The non-performing asset ratio stood at 1.04% in 2023, slightly improved from 1.05% in 2022[21] - The company's non-performing asset ratio decreased to 1.04% in 2023, down from 1.05% in 2022, indicating improved asset quality[104][105] - The non-performing asset ratio decreased from 1.05% at the end of 2022 to 1.04% at the end of 2023[113] - The provision coverage ratio was 227.59% in 2023, down from 239.97% in 2022[21] - The provision coverage ratio for non-performing assets was 227.59% in 2023, down from 239.97% in 2022[124] - The company's loan and receivables provision decreased by 5.41% to RMB 6.32 billion as of December 31, 2023[82] - The company's total overdue interest-bearing assets over 30 days as of December 31, 2023, were RMB 2,449,995 thousand, with 42.84% classified as "special mention" and 41.13% as "doubtful"[132] Business Segments and Revenue Breakdown - The company's healthcare services segment contributed RMB 12.8 billion to total revenue, accounting for 25.5% of the company's overall revenue[7] - The industrial operation segment achieved revenue of RMB 14.74 billion, a year-on-year increase of 11.38%, contributing 38.68% to total revenue[12] - Hongxin Construction Development achieved total revenue of RMB 9.61 billion, a 22.00% year-on-year increase, with adjusted annual profit of RMB 1.04 billion, up 10.65%[12] - Hongxin Health recorded total revenue of RMB 4.24 billion, a 15.53% year-on-year increase, with annual profit surging 252.75% to RMB 172 million[12] - Financial services (interest income) grew to RMB 22,467,103 thousand in 2023, up 3.6% from RMB 21,677,501 thousand in 2022[19] - Industrial operations revenue increased to RMB 14,739,271 thousand in 2023, an 11.4% rise from RMB 13,232,942 thousand in 2022[19] - The financial and consulting segment contributed RMB 23,363.434 million, accounting for 61.32% of total revenue (before taxes and surcharges), a decrease of 0.58% from 2022[38][40] - Industrial operations revenue increased by 11.38% to RMB 14.739 billion, with Hongxin Construction contributing RMB 9.611 billion (up 22.00%) and Hongxin Health contributing RMB 4.238 billion (up 15.53%)[41] - Interest income from financial services increased by 3.64% to RMB 22.467 billion, accounting for 58.97% of total revenue (before taxes and surcharges)[42] - Equipment operation revenue increased by 22.00% to RMB 9.611 billion, accounting for 65.20% of industrial operations revenue[50] - Hospital operation revenue increased by 15.53% to RMB 4.238 billion, accounting for 28.75% of industrial operations revenue[50] International Business and Expansion - Far East Horizon's international business revenue grew by 18.3% to RMB 6.5 billion in 2023[7] - Hongxin Construction Development officially listed on the Hong Kong Stock Exchange on May 25, 2023, becoming the group's first independent industrial platform to enter the international capital market[33] - As of December 31, 2023, Hongxin Construction Development had 490 outlets in mainland China and Hong Kong, covering nearly 200 cities[33] - Hongxin Construction Development ranked 14th among the global top 100 leasing companies as of December 31, 2023[33] - The company's equity attributable to ordinary shareholders increased by approximately RMB 870 million due to the listing of Hongxin Construction Development on the Hong Kong Stock Exchange on May 25, 2023[161] Research and Development - The company's research and development expenditure increased by 20% to RMB 1.2 billion in 2023, focusing on fintech and digital transformation initiatives[7] - The company has upgraded its core business systems, providing more standardized modules and multi-dimensional reporting functions for better risk assessment[193] - The company has integrated more intelligent audit functions into its systems, reducing manual errors and improving efficiency in risk identification and verification[193] Risk Management and Asset Quality - The company's non-performing asset ratio decreased to 1.04% in 2023, down from 1.05% in 2022, indicating improved asset quality[104][105] - The company has established a more sensitive and timely risk monitoring mechanism, focusing on key industries, customers, regions, and major anomalies[101] - The company's intelligent early warning system can predict risks 1-3 months in advance by combining big data AI algorithms with expert experience[102] - The company's normal assets accounted for 92.99% of total interest-bearing assets in 2023, showing a steady increase from 89.34% in 2020[104] - The company's special mention assets decreased to 5.97% of total interest-bearing assets in 2023, down from 7.00% in 2022[105] - The company implemented a five-stage management system for post-lease operations: early warning, decision-making, execution, collection, and write-off, forming a comprehensive closed-loop management system[101] - The company has improved automation levels in various processes, including contract generation, collection follow-up calls, and customer profile generation[102] - The company has strengthened its operational management by reinforcing the three lines of defense in credit processes and improving operational quality across all levels[191] Dividend and Shareholder Returns - The company plans to distribute a dividend of HKD 0.50 per share[13] - The company proposed a special dividend in kind, distributing approximately 160 million shares of Hongxin Construction Development, representing about 5% of its total issued shares as of December 6, 2023[160] Capital and Financing - The company's interest-bearing assets amounted to RMB 269.09 billion at the end of 2023, remaining stable compared to the beginning of the year[11] - The company's interest-earning assets accounted for 74.75% of the company's total assets as of December 31, 2023, showing a slight decrease of 0.13% compared to the previous year[81] - The company's average balance of interest-earning assets increased by 0.67% to RMB 272.824 billion, maintaining stable coverage of high-quality clients in key industries[45] - The company's capital expenditure for 2023 amounted to RMB 2,880.915 million, primarily used for property, plant, and equipment additions, as well as external equity investments[183] - The company updated its medium-term notes and perpetual securities program, allowing the issuance of up to USD 4,000,000,000 in notes and/or perpetual securities[165] - The company issued and outstanding convertible bonds as of December 31, 2023, include a $300 million bond due in 2025 with a 2.5% annual interest rate, and a $250 million zero-coupon bond due in 2026[166][167] - The net proceeds from the $300 million bond issuance were approximately $296.6 million, with a net conversion price of approximately HK$8.24 per share[166] - The net proceeds from the $250 million bond issuance were approximately $246 million, with a net conversion price of approximately HK$10.01 per share[167] - As of December 31, 2023, the outstanding principal amount of the $300 million bond was $290 million after a $10 million redemption in July 2023[166] - The outstanding principal amount of the $250 million bond remained at $250 million as of December 31, 2023[167] - If all convertible bonds were fully converted, the company would issue 569,336,712 shares, representing approximately 13.19% of the issued share capital as of December 31, 2023[170] - The conversion of all convertible bonds would dilute the shareholding of major shareholders, with China National Chemical Corporation's stake decreasing from 21.31% to 18.83%[171] - The company's credit ratings remained unchanged in 2023, and it has sufficient cash flow and bank credit lines to fully repay the bonds if held to maturity[173] - The implied internal rate of return for the convertible bonds issued on July 8, 2020, and June 15, 2021, indicates that bondholders will receive equally favorable economic returns whether they choose to convert or redeem the bonds by the end of 2023, 2024, and 2025, with conversion prices of HKD 6.59, HKD 8.94, HKD 9.12, and HKD 9.30 respectively[174] - The conversion prices for the convertible bonds issued in July 2020 and June 2021 were adjusted to HKD 6.48 and HKD 8.35 per share, respectively, due to the payment of special dividends on January 22, 2024[175] Industry and Regional Focus - The company focuses on industries with high stability, strong growth prospects, and national strategic support, including healthcare, education, public transportation, and infrastructure[186] - The company has optimized its regional economic capability and vitality model, prioritizing key economic zones and cities, and expanding to second and third-tier cities[186] - The company has strengthened its customer base by expanding horizontally along the industrial chain and deepening vertically within regions, improving customer management and quality[188] - The company encourages the development of national-level specialized and innovative SMEs, particularly "little giant" enterprises with a certain scale and history[189] - The company has improved its risk management by integrating industry, regional, and customer perspectives, and enhancing risk assessment for both large corporate clients and SMEs[189] - The company has implemented a joint evaluation model for large corporate clients, involving multi-industry expert reviews and unified credit control[190] - The company has reduced its non-performing asset ratio to 1.04% for the year[190] Interest Rate and Foreign Exchange Risk - The company's floating rate interest-bearing assets increased to RMB 1,889,670 thousand as of December 31, 2023, compared to RMB 1,727,588 thousand in the previous year[194] - The company's floating rate interest-bearing liabilities increased to RMB (104,378,061) thousand as of December 31, 2023, compared to RMB (92,206,276) thousand in the previous year[194] - The company's net exposure to interest rate risk was RMB (23,443,188) thousand as of December 31, 2023, compared to RMB (20,803,201) thousand in the previous year[194] - A 100 basis point increase in interest rates would decrease the company's pre-tax profit by RMB 42,814 thousand as of December 31, 2023, compared to a decrease of RMB 66,264 thousand in the previous year[196] - A 100 basis point decrease in interest rates would increase the company's pre-tax profit by RMB 44,389 thousand as of December 31, 2023, compared to an increase of RMB 68,147 thousand in the previous year[196] - The company's foreign exchange risk exposure was approximately USD 6,084 million as of December 31, 2023, with a hedging ratio of 99.97%[197] - A 1% increase in the RMB exchange rate would increase the company's equity by RMB 143 thousand as of December 31, 2023, compared to an increase of RMB 16,970 thousand in the previous year[199] Government Subsidies and Other Income - Government subsidies rose by 39.97% to RMB 225,377 thousand in 2023, supporting other income/earnings[66] - Government subsidies for the period amounted to approximately RMB 160 million, including VAT deduction benefits, enterprise development subsidies, and government support funds[67] - Equity and debt investment income surged by 163.97% to RMB 507,929 thousand in 2023, contributing to other income/earnings[66] Operational Costs and Expenses - Sales costs increased by 10.10% to RMB 19.959 billion, with financial and consulting division costs rising by 10.82% to RMB 9.982 billion[52] - Financial and consulting division costs increased by 10.82% to RMB 9,982,081 thousand in 2023, accounting for 50.01% of total sales costs[54] - Industrial operations division costs rose by 9.39% to RMB 9,976,734 thousand in 2023, representing 49.99% of total sales costs[54] - Equipment operation costs surged by 23.28% to RMB 5,849,180 thousand in 2023, making up 58.63% of industrial operations division costs[59] - Hospital operation costs grew by 13.13% to RMB 3,472,780 thousand in 2023, accounting for 34.81% of industrial operations division costs[59] - Gross profit decreased by 2.48% to RMB 18,000,983 thousand in 2023, with the gross margin dropping to 47.42% from 50.45% in 2022[60] - Net interest income declined by 1.46% to RMB 12,485,022 thousand in 2023, as interest expense growth outpaced interest income growth[62] - Industrial operations division gross profit increased by 15.80% to RMB 4,762,537 thousand in 2023, driven by strong growth in equipment and hospital operation gross profits[65] - Sales and administrative expenses increased by 19.59% to RMB 8,121.968 million, driven by market expansion strategies[68] - Other expenses decreased by 86.43% to RMB 55.09 million, with significant reductions in exchange losses and bank fees[69] - Financial costs decreased by 1.59% to RMB 1,037.956 million, primarily related to financing costs for the industrial operations division[70] - Pre-provision profit decreased by 14.66% to RMB 10,614.851 million, impacted by rising financing costs and reduced gains from off-balance sheet assets[71] - Asset provisions decreased by 91.05% to RMB 189.591 million, with significant reversals in fixed asset provisions due to improved market conditions[72] - Income tax

Investment Rating - Maintain Buy rating [1] Core Views - Industrial operations are the main growth engine, with the dividend payout ratio steadily increasing [4] - The company's 2023 performance met expectations, with revenue of RMB 37.96 billion (+3.8% YoY) and net profit of RMB 6.19 billion (+1.0% YoY) [4] - The company plans to distribute a dividend of HKD 0.5 per share, corresponding to a static dividend yield of 8.3% based on the closing price on March 12, 2024 [4] Revenue Breakdown - Industrial operations contributed 39% of revenue, up 3 percentage points YoY [4] - Financing lease interest income was RMB 22.47 billion (+3.6% YoY), accounting for 59% of revenue [4] - New business systems achieved interest income of RMB 2.09 billion (+12.1% YoY), accounting for 9% of revenue [4] - Industrial operations revenue was RMB 14.74 billion (+11% YoY), with equipment operations revenue at RMB 9.61 billion (+22% YoY) and hospital operations revenue at RMB 4.24 billion (+15.5% YoY) [4] Financing Lease Business - The interest-earning assets at the end of the period were RMB 2.69 trillion, flat compared to the beginning of the year [4] - The net interest margin expanded to 3.98% (+0.04 percentage points YoY) [4] - The non-performing loan ratio was 1.04% (-0.01 percentage points YoY), with a provision coverage ratio of 228% [4] Equipment Operations - The company maintains the leading market share in three major segments and has expanded into Southeast Asia [4] - The company's aerial work platform management scale reached 178,000 units, ranking first in Asia and top three globally [4] - The number of domestic service points increased to 490, covering nearly 200 cities, with 4 overseas points in Malaysia and Indonesia [4] Hospital Operations - The hospital operations segment benefited from the normalization of the operating environment [4] - The company focused on building regional differentiated disciplines and implemented a capital strategy to dispose of underperforming hospitals [4] - By the end of 2023, Hongxin Health owned 25 controlled hospitals, a decrease of 6 from the end of 2022 [4] Financial Forecasts - Revenue is expected to grow to RMB 47.26 billion by 2026, with a CAGR of 8.9% from 2023 to 2026 [5] - Net profit is expected to reach RMB 7.28 billion by 2026, with a CAGR of 6.6% from 2023 to 2026 [5] - The price-to-book ratio (PB) for 2024 is forecasted at 0.44x [4] Income Statement Highlights - Interest income is expected to grow to RMB 25.77 billion by 2026 [6] - Revenue from industrial operations is projected to reach RMB 21.38 billion by 2026 [6] - Net profit attributable to common shareholders is forecasted to be RMB 7.28 billion by 2026 [6] Balance Sheet Highlights - Total assets are expected to reach RMB 486.58 billion by 2026 [7] - Net interest-earning assets are projected to grow to RMB 336.41 billion by 2026 [7] - Common shareholders' equity is forecasted to increase to RMB 64.22 billion by 2026 [7]

Investment Rating - Buy (Maintained) [1] Core Views - The company's financial business remains stable, with industrial operations showing high growth, and its high dividend attribute is noteworthy [1] - The company's 2023 performance met expectations, with operating revenue reaching 37.96 billion yuan, a year-on-year increase of 3.76%, and net profit attributable to the parent company reaching 6.193 billion yuan, a year-on-year increase of 1.00% [2] - The company's financial and consulting segment saw a slight decline in interest income, but the financial services interest income increased by 3.64% to 22.467 billion yuan [3] - The industrial operations business achieved a revenue of 14.739 billion yuan, a year-on-year increase of 11.38%, with Hongxin Construction Development and Hongxin Health showing significant growth [3] - The company's net interest margin widened, and asset quality remained stable, with a non-performing asset ratio of 1.04%, a slight decrease from the previous year [3] Financial Performance and Valuation - The company's operating revenue is expected to grow steadily, with forecasts of 40.632 billion yuan, 43.046 billion yuan, and 45.504 billion yuan for 2024, 2025, and 2026, respectively [2] - Net profit attributable to the parent company is projected to be 6.649 billion yuan, 7.043 billion yuan, and 7.369 billion yuan for 2024, 2025, and 2026, respectively [2] - The EPS is expected to be 1.54 yuan, 1.63 yuan, and 1.71 yuan for 2024, 2025, and 2026, respectively [2] - The P/E ratio is forecasted to be 3.55, 3.35, and 3.20 for 2024, 2025, and 2026, respectively [2] Business Segments - Financial Services: Interest income from financial services increased by 3.64% to 22.467 billion yuan, with the average balance of interest-bearing assets increasing by 0.67% to 2.728 trillion yuan [3] - Industrial Operations: Revenue from industrial operations increased by 11.38% to 14.739 billion yuan, with Hongxin Construction Development and Hongxin Health contributing significantly [3] - Hongxin Construction Development expanded its overseas layout, with a management scale of 177,600 aerial work platforms, ranking first in Asia and top three globally [3] - Hongxin Health achieved a net profit of 170 million yuan, a year-on-year increase of 253%, by optimizing its hospital portfolio and improving management efficiency [3] Market Data - The closing price of the stock is 6.35 HKD, with a one-year low/high of 4.96/7.38 HKD [5] - The P/B ratio is 0.55, and the market capitalization is 27.401 billion HKD [5] Financial Indicators - The company's net asset per share is 11.61 HKD, with a debt-to-asset ratio of 83.62% [6] - The total share capital is 4.315 billion shares, with the same number of shares in circulation [6] Related Research - Previous reports have highlighted the company's special dividends and the strategic foresight of Hongxin Construction Development's listing [7]

Financial Performance - For the third quarter of 2023, the company achieved a slight year-on-year increase in operating revenue and net profit attributable to ordinary shareholders[1]. Asset Management - The total amount of interest-earning assets at the end of the period showed a slight increase compared to the beginning of 2023, with a stable asset quality and non-performing asset ratio[1]. Risk Management - The company maintained a prudent risk management strategy, with effective foreign exchange hedging measures and stable liquidity conditions[2]. Strategic Development - The company plans to continue its "Finance + Industry" development strategy, prioritizing operational safety and efficiency improvements[2]. Stock Options - The number of stock options granted under all stock option plans in 2022 was 33,847,932, representing approximately 0.0081% of the weighted average number of shares issued during the year[3].

Financial Performance - Total revenue for the six months ended June 30, 2023, reached RMB 18,361,807 thousand[9] - Profit attributable to ordinary shareholders for the same period was RMB 3,070,724 thousand[9] - Basic earnings per share for the six months ended June 30, 2023, was RMB 0.73[9] - Diluted earnings per share for the same period was RMB 0.66[10] - Total revenue for the six months ended June 30, 2023, was RMB 18,361,807 thousand, an increase from RMB 17,715,854 thousand in the same period of 2022, representing a growth of 3.65%[12] - Financial services (interest income) amounted to RMB 11,084,837 thousand, up from RMB 10,517,904 thousand year-over-year, reflecting a growth of 5.41%[12] - In the first half of 2023, the company achieved a net profit attributable to ordinary shareholders of RMB 3,070,724 thousand, an increase of 8.19% compared to the same period last year[28] - Basic earnings per share for the first half of 2023 was RMB 0.73, compared to RMB 0.68 in the same period of 2022, marking an increase of 7.35%[12] - The company's gross profit decreased by 5.10% to RMB 8,452,581 thousand, while sales costs increased by 12.49% to RMB 9,909,226 thousand[29] Asset Management - The company's total assets as of June 30, 2023, reached RMB 361,362,852 thousand, compared to RMB 358,485,563 thousand in the previous year, indicating a slight increase of 0.52%[13] - The total equity attributable to ordinary shareholders increased to RMB 47,327,470 thousand as of June 30, 2023, from RMB 42,180,697 thousand in the previous year, reflecting a growth of 12.77%[13] - Cash and cash equivalents increased by 34.45% to RMB 21,382,384 thousand compared to RMB 15,903,843 thousand at the end of the previous year[75] - The company's loan and receivables amounted to RMB 276,744,255 thousand, accounting for 76.59% of total assets, with a year-on-year increase of 3.60%[75] - The total amount of non-performing assets was RMB 2,928,744 thousand, up from RMB 2,831,337 thousand at the end of 2022[117] Risk Management - The company has implemented a five-level classification system for interest-bearing assets to effectively manage and control asset quality and risks[91] - The company emphasizes a proactive approach to risk management, combining online predictive models with offline manual verification for accurate risk assessment[96] - The non-performing asset ratio remained stable at 1.05% as of June 30, 2023, unchanged from the end of 2022, reflecting controlled overall asset quality[104] - The company has upgraded its risk prediction model using big data and AI algorithms, achieving early warning capabilities of 1 to 3 months for identifying risk enterprises[96] - The provision coverage ratio decreased to 234.87% from 239.97% at the end of 2022[115] Market Presence and Strategy - The company aims to integrate industrial and financial services to support sustainable economic development[6] - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency and service offerings[15] - The company is actively adjusting its service structure to meet customer demands in response to the declining consulting service revenue[39] - The company plans to maintain stable growth in traditional financial services while achieving rapid growth in industrial operations and innovative financial services[72] - The company aims to strengthen its understanding of macroeconomic trends and industry dynamics to better navigate market challenges[178] Healthcare Operations - The healthcare segment saw a significant increase in patient visits and hospital admissions, capitalizing on the post-pandemic recovery[26] - The company plans to continue expanding its healthcare services in county-level markets, aiming to build the largest county health service platform in China[26] - The group operates 29 hospitals with approximately 11,000 open beds, covering regions including East China, South China, North China, Southwest, and Northeast, enhancing its national hospital operation network[200] - The group completed the equity transfer of Zhengzhou Renji Hospital in the first half of 2023, continuing to optimize asset efficiency and accelerate strategic upgrades[200] - The healthcare sector accounted for 16.50% of total assets, increasing from 15.59% at the end of 2022[121] Financing and Capital Structure - The group’s total assets at the beginning of the year were RMB 2,831,337 thousand, showing an increase to RMB 2,928,744 thousand by the end of the period[112] - The total liabilities of the group reached RMB 304,900,349 thousand, an increase of RMB 10,346,274 thousand or 3.51% compared to the end of the previous year[131] - The group's offshore financing increased significantly by 32.88% to RMB 56,972,723 thousand as of June 30, 2023, compared to RMB 42,873,721 thousand at the end of 2022[144] - The company has issued perpetual securities totaling RMB 1,000,000,000 with an initial distribution rate of 4.2% on July 6, 2022[153] - The company plans to potentially issue new perpetual securities based on market conditions and financing needs in the future[156]

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份內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 （於香港註冊成立的有限公司） （股份代號：3360） 截至二零二三年六月三十日止六個月中期業績公告 遠東宏信有限公司（「本公司」）董事局（「董事局」）謹此公佈本公司及其附屬公司 （「本集團」）截至二零二三年六月三十日止六個月的未經審核中期業績，連同截至 二零二二年六月三十日止六個月的比較數字。本公告列載本公司二零二三年中期 報告全文，並符合香港聯合交易所有限公司（「聯交所」）證券上市規則（「上市規 則」）中有關中期業績初步公告附載的資料之要求。 承董事局命 遠東宏信有限公司 主席、行政總裁及執行董事 孔繁星 香港，二零二三年八月九日 於本公告日期，本公司執行董事為孔繁星先生（主席）、王明哲先生及曹健先生； 本公司非執行董事為陳樹民先生、衛濛濛女士、劉海峰先生、郭明鑑先生及羅強 ...