Performance Overview [Operating Performance and Profitability](index=8&type=section&id=Performance%20Overview-Operating%20Performance%20and%20Profitability) The company's total revenue decreased to RMB 4.35 billion, with gross profit falling to RMB 940 million and profit attributable to ordinary equity holders significantly declining to RMB 35.49 million, resulting in a basic EPS of RMB 0.011 Key Operating Results for the Six Months Ended June 30, 2025 | Metric | First Half 2025 (Thousands of RMB) | First Half 2024 (Thousands of RMB) | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | 4,350,062 | 4,872,421 | -10.7% | | **Gross Profit** | 940,667 | 1,559,325 | -39.7% | | **Gross Margin** | 21.6% | 32.0% | -10.4pp | | **Profit Before Tax** | 50,276 | 406,890 | -87.6% | | **Profit Attributable to Ordinary Equity Holders of the Company** | 35,490 | 268,228 | -86.8% | | **Basic Earnings Per Share (RMB)** | 0.011 | 0.084 | -86.9% | Gross Profit and Gross Margin by Business Segment | Business Segment | Gross Profit First Half 2025 (Thousands of RMB) | Gross Margin First Half 2025 | Gross Margin First Half 2024 | | :--- | :--- | :--- | :--- | | Operating Lease Services | 621,196 | 27.4% | 37.1% | | Engineering Technical Services | 171,407 | 15.1% | 27.0% | | Asset Management and Other Services | 148,064 | 15.7% | 32.1% | - Profitability metrics significantly declined, with **Return on Average Equity (ROAE)** decreasing from **4.9%** in the prior year period to **0.6%**[11](index=11&type=chunk) [Balance Sheet Position](index=9&type=section&id=Performance%20Overview-Balance%20Sheet%20Position) As of June 30, 2025, the Group's total assets remained stable at RMB 36.58 billion, while total liabilities slightly increased to RMB 25.25 billion, and total equity decreased to RMB 11.33 billion Summary of Balance Sheet as of June 30, 2025 | Metric | June 30, 2025 (Thousands of RMB) | December 31, 2024 (Thousands of RMB) | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | 36,581,356 | 36,434,181 | +0.4% | | **Total Liabilities** | 25,253,610 | 24,975,831 | +1.1% | | **Total Equity** | 11,327,746 | 11,458,350 | -1.1% | | **Gearing Ratio** | 69.0% | 68.6% | +0.4pp | | **Net Asset Value Per Share (RMB)** | 3.62 | 3.66 | -1.1% | Management Discussion and Analysis [Industry Environment and Company Response](index=12&type=section&id=1%E3%80%81Industry%20Environment%20and%20Company%20Response) The company adopted a dual-track strategy of domestic lean operations and aggressive overseas expansion, optimizing asset structure and reducing costs domestically while accelerating global presence through acquisitions and tiered resource allocation abroad - Domestic Market: In the first half of 2025, China's GDP grew **5.3% YoY**, but the construction sector was generally sluggish, with real estate development construction area decreasing **9.1% YoY**; however, infrastructure investment and manufacturing investment grew **4.6%** and **7.5%** respectively, supporting engineering machinery leasing[15](index=15&type=chunk) - Overseas Markets: Emerging markets like Southeast Asia, the Middle East, and Africa show strong infrastructure demand, with the construction sector and GDP in several countries where the company operates (e.g., Malaysia, Indonesia, Vietnam, Saudi Arabia) exhibiting good growth trends[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - Company Response Strategy: Domestically, shifting from investment-driven to lean operations, optimizing asset structure, and expanding into diversified scenarios like mining and marine engineering; overseas, firmly executing the '3+3+3' strategy, consolidating Southeast Asia, deeply exploring Middle East potential, and completing the acquisition of a leading Malaysian leasing company[24](index=24&type=chunk)[25](index=25&type=chunk) - As of the first half of 2025, the Group's global service network reached **567** locations, with **63** overseas, covering **7** countries[25](index=25&type=chunk) [Income Statement Analysis](index=17&type=section&id=2%E3%80%81Income%20Statement%20Analysis) In the first half of 2025, total revenue decreased 10.7% to RMB 4.35 billion, gross margin fell to 21.6%, and profit for the period plummeted 86.8% to RMB 35.49 million, with overseas business profitability being a key highlight [Income Statement Overview](index=17&type=section&id=2.1%20Income%20Statement%20Analysis%20%28Overview%29) In the first half of 2025, revenue decreased 10.7%, profit before tax sharply declined 87.6% to RMB 50.28 million, while selling and administrative expenses and finance costs increased, though adjusted EBITDA saw only a slight 1.7% decrease Summary of Income Statement for the First Half of 2025 | Item | For the Six Months Ended June 30 (2025) (Thousands of RMB) | For the Six Months Ended June 30 (2024) (Thousands of RMB) | Change % | | :--- | :--- | :--- | :--- | | Revenue | 4,350,062 | 4,872,421 | -10.7% | | Gross Profit | 940,667 | 1,559,325 | -39.7% | | Profit Before Tax | 50,276 | 406,890 | -87.6% | | Profit for the Period | 35,490 | 268,228 | -86.8% | EBITDA (Non-HKFRS Measure) | Item | For the Six Months Ended June 30 (2025) (Thousands of RMB) | For the Six Months Ended June 30 (2024) (Thousands of RMB) | Change % | | :--- | :--- | :--- | :--- | | EBITDA | 1,968,638 | 2,003,614 | -1.7% | | Depreciation and Amortization | 1,521,215 | 1,224,653 | 24.2% | [Revenue Analysis](index=18&type=section&id=2.2%20Revenue) Total revenue decreased 10.7% to RMB 4.35 billion, driven by domestic rental declines and engineering services contraction, while operating lease services revenue grew 19.5% and overseas revenue surged 719.8% to RMB 597 million, becoming a key growth driver Revenue by Business Segment | Business Segment | First Half 2025 Revenue (Thousands of RMB) | Revenue Share | YoY Change % | | :--- | :--- | :--- | :--- | | Operating Lease Services | 2,265,244 | 52.1% | +19.5% | | Engineering Technical Services | 1,138,882 | 26.2% | -41.5% | | Asset Management and Other Services | 945,936 | 21.7% | -8.2% | | **Total** | **4,350,062** | **100.0%** | **-10.7%** | Revenue by Geographical Segment | Geographical Segment | First Half 2025 Revenue (Thousands of RMB) | Revenue Share | YoY Change % | | :--- | :--- | :--- | :--- | | Domestic Regions (including Hong Kong and Macau) | 3,752,682 | 86.3% | -21.8% | | Overseas Regions | 597,380 | 13.7% | +719.8% | | **Total** | **4,350,062** | **100.0%** | **-10.7%** | Key Product Line Operating Data | Product Line | Metric | First Half 2025 | First Half 2024 | | :--- | :--- | :--- | :--- | | Aerial Work Platforms | Equipment Under Management (Thousands of Units) | 202.6 | 204.8 | | | Utilization Rate | 64.0% | 65.6% | | New Support Systems | Equipment Under Management (Thousands of Tons) | 1,371.1 | 1,613.2 | | | Utilization Rate | 70.4% | 66.9% | | New Formwork and Scaffolding Systems | Equipment Under Management (Thousands of Tons) | 638.3 | 748.4 | | | Utilization Rate | 66.3% | 75.6% | [Gross Profit and Gross Margin Analysis](index=23&type=section&id=2.3%20Gross%20Profit%20and%20Gross%20Margin) Gross profit decreased 39.7% to RMB 941 million, with overall gross margin falling 10.4 percentage points to 21.6% due to market price fluctuations, while overseas business gross profit contribution significantly increased to 28.8% Gross Profit and Gross Margin by Business Segment | Business Segment | Gross Profit First Half 2025 (Thousands of RMB) | Gross Margin % | YoY Change in Gross Profit Amount % | | :--- | :--- | :--- | :--- | | Operating Lease Services | 621,196 | 27.4% | -11.6% | | Engineering Technical Services | 171,407 | 15.1% | -67.4% | | Asset Management and Other Services | 148,064 | 15.7% | -55.3% | | **Total Gross Profit** | **940,667** | **21.6%** | **-39.7%** | - Operating lease services gross margin decreased **9.7 percentage points** to **27.4%**, primarily impacted by utilization rates and rental price fluctuations of aerial work platforms and new formwork and scaffolding systems[45](index=45&type=chunk) - Overseas regions' gross profit surged **2,638.8% YoY** to **RMB 271 million**, significantly increasing its share of total gross profit from **0.6%** to **28.8%**[48](index=48&type=chunk) [Cost and Expense Analysis](index=25&type=section&id=2.4%20Cost%20of%20Sales%20and%20Selling%20and%20Administrative%20Expenses) In the first half of 2025, total cost of sales and selling & administrative expenses increased 4.0% to RMB 4.17 billion, driven by higher depreciation and trading costs, while staff and transportation costs were effectively controlled Cost of Sales and Selling and Administrative Expenses (by Nature) | Item | First Half 2025 (Thousands of RMB) | % of Revenue | YoY Change % | | :--- | :--- | :--- | :--- | | Depreciation and Amortization | 1,486,981 | 34.2% | +24.3% | | Staff and Subcontracting Costs | 944,183 | 21.7% | -6.9% | | Trading and Sub-lease Costs | 658,887 | 15.1% | +15.2% | | Transportation and Hoisting Fees | 304,439 | 7.0% | -32.1% | | Research and Development (R&D) Expenses | 106,442 | 2.4% | +50.1% | | **Total** | **4,167,726** | **95.8%** | **+4.0%** | - Depreciation and amortization significantly increased by **24.3%**, primarily due to the combined effect of increased equipment scale compared to the prior year period and changes in accounting policies (extending the useful life of some scaffolding)[50](index=50&type=chunk)[51](index=51&type=chunk) - Transportation and hoisting fees significantly decreased by **32.1%**, benefiting from lower asset rental volume and a logistics cost reduction management system, with logistics unit prices decreasing **4.2% YoY**[51](index=51&type=chunk) [Finance Costs Analysis](index=28&type=section&id=2.8%20Finance%20Costs) Finance costs increased 5.0% to RMB 401 million due to higher borrowing interest, but the average financing rate decreased from 3.99% to 3.69%, effectively mitigating the growth of interest expenses Interest Expense on Interest-bearing Bank and Other Borrowings | Metric | First Half 2025 | First Half 2024 | | :--- | :--- | :--- | | Average Balance (Thousands of RMB) | 21,063,794 | 18,382,079 | | Interest Expense (Thousands of RMB) | 388,992 | 367,027 | | Average Financing Rate (Annualized) | 3.69% | 3.99% | - The average financing rate decreased by **0.30 percentage points**, primarily due to central bank interest rate cuts and preferential rates obtained by the company[60](index=60&type=chunk) [Profit for the Period and Earnings Per Share](index=30&type=section&id=2.10%20Profit%20for%20the%20Period) The Group's profit for the first half of 2025 significantly decreased 86.8% to RMB 35.49 million, with domestic regions incurring a loss while overseas regions achieved a profit of RMB 113 million, and basic EPS fell to RMB 0.011 Net Profit After Tax by Geographical Segment | Geographical Segment | First Half 2025 (Thousands of RMB) | First Half 2024 (Thousands of RMB) | | :--- | :--- | :--- | | Domestic Regions (including Hong Kong and Macau) | -77,861 | 296,955 | | Overseas Regions | 113,351 | -28,727 | | **Total** | **35,490** | **268,228** | - Basic earnings per share was **RMB 0.011**, a **86.9%** decrease from **RMB 0.084** in the prior year period[64](index=64&type=chunk)[65](index=65&type=chunk) [Financial Position Analysis](index=31&type=section&id=3%E3%80%81Financial%20Position%20Analysis) As of June 30, 2025, total assets remained stable at RMB 36.58 billion, with PPE slightly decreasing, receivables increasing but with longer DSO, total liabilities rising to RMB 25.25 billion, and overseas assets significantly growing 52.8% [Asset Analysis](index=31&type=section&id=3.1%20Assets%20%28Overview%29) Total assets slightly increased 0.4% to RMB 36.58 billion, with PPE decreasing, receivables growing but with longer DSO, cash and bank balances increasing 38.1% to RMB 2.48 billion, and overseas assets significantly growing 52.8% to RMB 5.42 billion Asset Structure | Asset Item | June 30, 2025 (Thousands of RMB) | % of Total | Change from Beginning of Year % | | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 21,720,292 | 59.4% | -2.4% | | Receivables and Contract Assets | 6,810,439 | 18.6% | +2.8% | | Cash and Bank Balances | 2,476,599 | 6.8% | +38.1% | | Other Assets | 5,573,926 | 15.2% | -5.1% | | **Total Assets** | **36,581,356** | **100.0%** | **+0.4%** | - Days sales outstanding for receivables increased from **193 days** in the prior year period to **248 days**, primarily due to stable net receivables despite a decrease in revenue[78](index=78&type=chunk)[79](index=79&type=chunk) - Goodwill increased from zero to **RMB 174 million** due to the acquisition of the Malaysian company[86](index=86&type=chunk) - Total overseas assets reached **RMB 5.42 billion**, a **52.8%** increase from the beginning of the year, raising their share of total assets from **9.7%** to **14.8%**[67](index=67&type=chunk) [Liability Analysis](index=38&type=section&id=3.10%20Liabilities%20%28Overview%29) Total liabilities slightly increased 1.1% to RMB 25.25 billion, with interest-bearing borrowings at RMB 21.22 billion, accounting for 84.0%; debt structure optimized with unsecured borrowings increasing to 66.6%, while payables decreased 6.3% Liability Structure | Liability Item | June 30, 2025 (Thousands of RMB) | % of Total | Change from Beginning of Year % | | :--- | :--- | :--- | :--- | | Interest-bearing Bank and Other Borrowings | 21,224,692 | 84.0% | +1.5% | | Payables and Bills Payable | 2,244,433 | 8.9% | -6.3% | | Other Payables and Accrued Expenses | 1,001,932 | 4.0% | +13.0% | | **Total Liabilities** | **25,253,610** | **100.0%** | **+1.1%** | - The proportion of unsecured interest-bearing bank and other borrowings increased from **61.6%** at the beginning of the year to **66.6%**, with a corresponding decrease in the secured portion, indicating optimized financing structure[92](index=92&type=chunk) [Shareholders' Equity](index=41&type=section&id=3.17%20Shareholders%27%20Equity) As of June 30, 2025, total equity decreased 1.1% to RMB 11.33 billion, primarily due to dividend distribution and other equity changes, partially offset by profit for the period Changes in Equity | Item | Amount (Thousands of RMB) | | :--- | :--- | | As of December 31, 2024 | 11,458,350 | | Profit for the Period | 35,490 | | Dividend Distribution | -132,874 | | Other Equity Changes | -33,220 | | **As of June 30, 2025** | **11,327,746** | - The company distributed the final dividend for the year 2024 of **HKD 0.045 per share** on July 2, 2025[101](index=101&type=chunk) [Capital Management, Capital Expenditure, and Risk Management](index=42&type=section&id=4%E3%80%81Capital%20Management) The company maintains prudent capital management, despite profitability metrics deteriorating with ROAE at 0.6%, while the gearing ratio remains stable at 69.0%; net capital expenditure significantly decreased 90.3% to RMB 384 million, and risk management focuses on foreign exchange and liquidity Key Financial Ratios | Metric | First Half 2025 | First Half 2024 | | :--- | :--- | :--- | | Return on Average Equity | 0.6% | 4.9% | | Return on Average Assets | 0.2% | 1.6% | | Gearing Ratio (Period-end) | 69.0% | 68.7% | - Capital expenditure in the first half was **RMB 825 million**, a significant **81.1% YoY** decrease; net capital expenditure after deducting second-hand equipment sales was **RMB 384 million**, a **90.3% YoY** decrease[109](index=109&type=chunk) - The company hedges foreign exchange risk through derivative financial instruments and manages liquidity risk by optimizing financing structure and maintaining cash positions[111](index=111&type=chunk)[112](index=112&type=chunk) [Significant Investments and Human Resources](index=44&type=section&id=9%E3%80%81Significant%20Investments%2C%20Acquisitions%20or%20Disposals) The Group's key strategic move was acquiring an 80% stake in TH Tong Heng Machinery Sdn. Bhd. in Malaysia, deepening overseas expansion, while total employees decreased, and the 2024 equity incentive plan continued to retain core talent - In May 2025, the Group completed the acquisition of an **80%** equity stake in TH Tong Heng Machinery Sdn. Bhd. in Malaysia for approximately **MYR 171 million** (approximately **RMB 290 million**), which constitutes a discloseable transaction[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - As of June 30, 2025, the Group's total number of employees was **4,317**, a decrease from **5,346** in the prior year period[127](index=127&type=chunk) - During the reporting period, the company did not grant new options or shares under the 2024 Share Option Scheme and Restricted Share Award Scheme, but some lapsed due to employee departures and other reasons[129](index=129&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) [Future Outlook](index=50&type=section&id=13%E3%80%81Future%20Outlook) For the second half of 2025, the Group will continue its dual-track strategy, focusing on lean operations, customer marketing, and asset optimization domestically, while pursuing a 'deepen existing, expand emerging' approach overseas, cautiously exploring new markets in Africa, South America, and Asia to expand its international footprint - Domestic Strategy: Focus on lean operations, enhancing asset full lifecycle value through deepened customer marketing, industry solution development, and optimized asset allocation[135](index=135&type=chunk) - Overseas Strategy: Adopt a dual-driven model of 'deepening existing countries' and 'expanding into emerging markets', implementing the '3+3+3' overseas development strategy[135](index=135&type=chunk) - New Market Expansion: The next step will focus on evaluating and deploying in regions with development potential, such as Africa, South America, and Asia[135](index=135&type=chunk) Other Significant Matters [Disclosure of Interests](index=51&type=section&id=Disclosure%20of%20Interests) The report details the shareholdings of directors, chief executives, and major shareholders as of June 30, 2025, with controlling shareholder Far East Horizon holding approximately 47.22% of total interests, and several directors holding shares via in-specie distributions or equity incentive plans - Controlling shareholder Far East Horizon Limited directly holds **1,333,247,413 shares** (**41.70%**) and indirectly holds **176,600,000 shares** (**5.52%**) through controlled corporations, totaling approximately **47.22%** of interests[145](index=145&type=chunk) - Several directors and chief executives, including Kong Fanxing, Zhan Jing, and Tang Li, hold shares or related interests in the company, with some interests derived from Far East Horizon's in-specie distribution and the company's equity incentive plan[136](index=136&type=chunk)[138](index=138&type=chunk) [Corporate Governance](index=56&type=section&id=Corporate%20Governance) The company largely complied with the Corporate Governance Code, with one deviation where the Chairman and several committee chairmen were absent from the AGM due to work commitments, and directors confirmed compliance with the standard code for securities transactions - The company deviated from Rule F.2.2 of the Corporate Governance Code, as the Chairman of the Board and several committee chairmen were unable to attend the Annual General Meeting due to other work commitments[148](index=148&type=chunk)[149](index=149&type=chunk) - The company has established an Audit Committee, which reviewed this interim report[153](index=153&type=chunk)[154](index=154&type=chunk) [Dividends and Related Party Transactions](index=58&type=section&id=Other%20Information) The Board recommended no interim dividend for the six months ended June 30, 2025, and the company entered into a three-year cooperation framework agreement with controlling shareholder Far East Horizon for mutual services, constituting continuing connected transactions - The Board recommended no interim dividend for 2025 (prior year period: **HKD 0.05 per share**)[156](index=156&type=chunk) - The company entered into a cooperation framework agreement with controlling shareholder Far East Horizon, involving the Group providing engineering technical and leasing services to Far East Horizon (annual cap **RMB 141 million**) and Far East Horizon providing consulting services to the Group (annual cap **RMB 25 million**)[158](index=158&type=chunk) Condensed Interim Consolidated Financial Statements [Independent Review Report](index=61&type=section&id=Independent%20Review%20Report) Ernst & Young, the auditor, reviewed the Group's interim financial information for the six months ended June 30, 2025, concluding that it was prepared in all material respects according to HKAS 34 - Ernst & Young issued an **unmodified review conclusion** on the interim financial information[166](index=166&type=chunk) [Principal Financial Statements](index=62&type=section&id=Principal%20Financial%20Statements) The financial statements detail the Group's operating results, financial position, and cash flows, showing decreased revenue and profit, stable asset/liability sizes with structural changes like increased overseas assets, and net cash inflows from operations despite investment and financing outflows Summary of Condensed Interim Consolidated Cash Flow Statement | Item | For the Six Months Ended June 30, 2025 (Thousands of RMB) | | :--- | :--- | | Net Cash Flows from Operating Activities | 1,780,366 | | Net Cash Flows Used in Investing Activities | (861,560) | | Net Cash Flows Used in Financing Activities | (519,592) | | **Net Increase in Cash and Cash Equivalents** | **399,214** | | **Cash and Cash Equivalents at End of Period** | **2,176,580** | [Summary of Notes to the Financial Statements](index=70&type=section&id=Notes%20to%20the%20Financial%20Statements) The notes provide detailed explanations for key financial statement items, including business combinations (TH Tong Heng Machinery acquisition and goodwill), segment reporting (overseas growth), financial instruments (receivables, borrowings, derivatives), and related party transactions - Note 32 discloses that the acquisition of TH Tong Heng Machinery Sdn. Bhd. generated **RMB 174 million** in goodwill and recognized a contingent consideration financial liability of **RMB 73.94 million**[283](index=283&type=chunk)[285](index=285&type=chunk) - Note 4 discloses that total overseas assets reached **RMB 5.42 billion**, accounting for **14.82%** of total assets, a significant increase from **9.74%** at the beginning of the year[190](index=190&type=chunk) - Note 26 discloses that the Group's total interest-bearing bank and other borrowings amounted to **RMB 21.22 billion**, of which **RMB 6.77 billion** (**31.9%**) were secured borrowings[259](index=259&type=chunk)[92](index=92&type=chunk) - Notes 19 and 21 disclose that the expected credit loss provision rates for trade receivables and contract assets were **14.06%** and **9.17%** respectively[240](index=240&type=chunk)[248](index=248&type=chunk)

Group 1 - The article provides a list of companies listed on the Hong Kong stock market along with their dividend distribution dates and shareholder meeting dates [1][4][5] - Notable companies mentioned include China Railway, Green Town China, and Budweiser APAC, which are scheduled for dividend payments [4][5] - The document outlines various companies' actions regarding capital increases and dividend distributions, indicating ongoing corporate activities in the market [4][5]

Core Viewpoint - The company, Macro Holdings (09930.HK), anticipates a significant decline in revenue and shareholder profit for the first half of 2025 compared to the same period in 2024, with expected revenue dropping by approximately 10% and shareholder profit decreasing by 80%-90% [1][2]. Group 1: Revenue and Profit Forecast - The company expects total revenue for the first half of 2025 to decrease to approximately RMB 4,385,179 thousand from RMB 4,872,421 thousand in the first half of 2024, indicating a decline of about 10% [1]. - Shareholder profit for the first half of 2025 is projected to fall to between RMB 26,823 thousand and RMB 53,646 thousand, down from RMB 268,228 thousand in the first half of 2024, representing a decrease of 80%-90% [1]. Group 2: Reasons for Decline - The decline in revenue and profit is primarily attributed to the adverse market conditions in the equipment rental industry in mainland China, where rental prices have continuously decreased, impacting operational leasing income and gross profit despite stable utilization rates of aerial work platforms [2]. - The company has adopted a proactive contraction strategy for its materials business in mainland China, leading to a reduction in engineering technical service income and a delayed impact on gross profit margins due to the clearance of labor and site costs [2]. - The ongoing decline in steel prices has also contributed to a decrease in trade income and gross profit from the sale of material assets [2]. - Although the overseas business segment has experienced rapid revenue growth and achieved profitability, its smaller scale compared to domestic operations means it cannot fully offset the downturn in the domestic market [2].

Core Viewpoint - Hongxin Jianda has signed a share acquisition agreement with TH Tong Heng Machinery, marking its first cross-border acquisition and aiming to enhance its market presence in Malaysia through strategic synergies [1][2]. Group 1: Acquisition Details - Hongxin Jianda will acquire 80% of TH Tong Heng Machinery initially, with the remaining 20% to be priced based on future performance [1]. - TH Tong Heng Machinery is the largest comprehensive equipment rental company in Malaysia, established in 1994, and ranks 71st in the 2024 global aerial work platform rental list [1]. - The acquisition is expected to create significant synergies in product complementarity, channel integration, and technology fusion [2]. Group 2: Company Background - Hongxin Jianda, a flagship platform under Far East Horizon, was listed in Hong Kong in May 2023 and ranks 14th in the 2024 global equipment rental company list [2]. - The company has established a global service network covering 59 overseas locations across 7 countries [2]. Group 3: Market Impact - The acquisition is anticipated to deepen Hongxin Jianda's market penetration in Malaysia, leveraging a stable customer base of over 1,000 clients with low concentration and strong loyalty [2]. - The first quarter operational summary indicates a rising rental rate for key equipment, with the rental rate for aerial work platforms reaching approximately 78% [3]. - Overseas business revenue for the first quarter of 2025 has significantly increased compared to the same period last year, now accounting for over 15% of total revenue [3].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price yet to be specified [3][12]. Core Insights - The company has signed a share acquisition agreement with TH Tong Heng Machinery, Malaysia's largest comprehensive equipment leasing company, to acquire 80% of its shares, which is expected to enhance market presence and operational synergies in Malaysia [1][2]. - The acquisition price is approximately RMB 300 million (around MYR 176 million), corresponding to about 6 times the target company's EBITDA, indicating a reasonable valuation given the target's strong profitability metrics [2]. - The target company is projected to achieve a compound annual growth rate (CAGR) of 31% in revenue from fiscal years 2021 to 2024, with EBITDA and net profit margins of 70% and 28.3% respectively for 2024, showcasing robust financial health [2]. Summary by Sections Company Overview - The report highlights the company's strategic move to deepen its operational footprint in Malaysia through the acquisition of a leading local player, which is expected to enhance its competitive edge and market share [1][2]. Financial Performance - The company's first-quarter operational summary indicates a rising rental rate for key equipment, with a rental rate of approximately 78% for aerial work platforms by the end of the quarter [3]. - The overseas business revenue has significantly increased, accounting for over 15% of total revenue, suggesting successful global expansion efforts [3]. Market Position - The company operates 579 outlets globally, with a slight reduction in domestic outlets but an increase in overseas outlets, indicating a strategic focus on international growth [3]. - The report anticipates net profits for the years 2025 to 2027 to be RMB 1.02 billion, RMB 1.15 billion, and RMB 1.3 billion respectively, with corresponding price-to-earnings (PE) ratios of 3.6, 3.2, and 2.8 times [3].

Investment Rating - The investment rating for the company is "Buy" with a target price not specified in the report [3][4]. Core Viewpoints - The company has signed a share acquisition agreement with TH Tong Heng Machinery, the largest comprehensive equipment leasing company in Malaysia, to acquire 80% of its shares, which is expected to enhance market share and competitiveness in Malaysia [1][2]. - The acquisition price is approximately RMB 300 million, corresponding to about 1.76 billion MYR, which is considered reasonable at about 6 times EBITDA, with the target company's revenue compound annual growth rate projected at 31% from 2021 to 2024 [2]. - The company is optimizing its asset structure and controlling capital expenditures, which is expected to improve asset return rates and enhance overseas operational performance [3]. Summary by Sections Acquisition Details - The acquisition of TH Tong Heng Machinery is a strategic move to deepen the company's presence in the Malaysian market, leveraging a stable customer base of over 1,000 clients [1]. - The remaining 20% of shares will be priced based on future long-term operating performance [1]. Financial Performance - The target company reported total assets of 163 million MYR and net assets of 91.9 million MYR as of the end of 2024, indicating strong financial health [2]. - The company's EBITDA margin and net profit margin for 2024 are projected to be 70% and 28.3%, respectively [2]. Operational Efficiency - The company's rental rates for key equipment categories have been increasing, with a reported rental rate of approximately 78% for aerial work platforms by the end of Q1 2025 [3]. - The overseas business revenue has significantly increased, accounting for over 15% of total revenue, indicating successful global expansion efforts [3]. Future Projections - The company expects net profits for the years 2025 to 2027 to be 1.02 billion, 1.15 billion, and 1.3 billion RMB, respectively, with corresponding price-to-earnings ratios of 3.6, 3.2, and 2.8 times [3].

Summary of the Conference Call Company and Industry Involved - **Company**: 红星建发 (Hongxing Jianda) - **Industry**: Equipment Rental Market in Malaysia Key Points and Arguments - **Acquisition Strategy**: 红星建发 acquired 东庆公司 (Dongqing Company) to bypass local regulations on second-hand equipment imports, quickly gain local customer resources, and enhance service quality and efficiency, thereby reducing reliance on Chinese clients and price competition [2][3][5] - **Market Growth**: The Malaysian equipment rental market is experiencing stable growth, with the number of aerial work platforms reaching 12,000 units. 红星建发 and 东庆 together hold approximately 35% market share, benefiting from data center projects in the new special zone [2][7] - **东庆 Company Profile**: 东庆 is the largest equipment rental company in Malaysia, with around 1,400 units and a high local customer repurchase rate of 90%. It has a net asset of approximately 100 million MYR and an EBIT of 40 million MYR, with an ROE exceeding 10% [2][4] - **Strategic Goals Post-Merger**: The joint venture aims to complement customer bases, influence industry policy, reduce operational costs, and absorb smaller rental companies through a buy-and-build model to enhance operational capabilities [2][9] - **Future Market Projections**: 红星建发 anticipates that the equipment inventory in Malaysia will grow to 19,000-20,000 units in the next 3-5 years, focusing on new machine sales through an agency model while maintaining strict PMA certification rules to limit second-hand equipment influx [2][15] Additional Important Content - **Regulatory Challenges**: The company faced challenges due to regulatory changes that restricted the import of second-hand equipment without PMA certification, prompting the acquisition of 东庆 as a solution [3][5] - **Market Dynamics**: The Malaysian market is characterized by a focus on service quality and efficiency among local clients, contrasting with the price competition prevalent in the Chinese market [4][6] - **Cost Optimization**: Post-merger, cost optimization strategies include reducing site rental fees, lowering PMA certification costs, and utilizing 东庆's logistics capabilities to halve logistics costs [10] - **Long-term Outlook**: The outlook is optimistic, with plans to strengthen ties with local clients and absorb smaller rental companies, aiming for sustainable long-term growth [11] - **Valuation Comparisons**: The valuation of the Southeast Asian equipment rental market is generally higher than that of the Hong Kong capital market, with acquisition multiples ranging from 8 to 12 times EBITDA in the region [12][24] - **Future Expansion Plans**: The company plans to continue expanding its overseas presence, particularly in the Middle East and Southeast Asia, through strategic acquisitions and potential public listings [22][25] This summary encapsulates the key insights from the conference call, highlighting the strategic direction and market dynamics of 红星建发 in the Malaysian equipment rental industry.

Group 1 - Hongxin Jianda (09930.HK) has signed a share acquisition agreement to acquire 80% of TH Tong Heng Machinery, the largest comprehensive equipment leasing company in Malaysia, with plans for full integration of operations [1] - The remaining 20% of shares will be priced based on future long-term operating performance [1] - Hongxin Jianda's overseas business revenue for Q1 2025 has significantly increased compared to the same period last year, now accounting for over 15% of total revenue [1] Group 2 - The acquisition is part of a strategic move to enhance Hongxin Jianda's market share and competitiveness in Malaysia, emphasizing the integration of "Chinese manufacturing + Chinese services" [2] - The CEO of Hongxin Jianda highlighted that this acquisition is a key step in the company's international strategy, aimed at deepening product categories and customer base [2]

Group 1 - The core transaction involves the acquisition of an 80% stake in TH Tong Heng Machinery Sdn. Bhd. for a cash consideration of 176 million MYR (approximately 299 million RMB) [1][2] - Following the completion of the transaction, TH Tong Heng Machinery will become a subsidiary of the company, and its financial performance will be consolidated into the group's financial statements [2][3] - The acquisition is part of the company's strategic initiative to enhance its market position and operational capabilities in Southeast Asia, aiming to expand its overseas asset base and integrate a mature sales distribution network in Malaysia [3][4] Group 2 - The target company, established in 1994, primarily engages in machinery and equipment leasing, as well as the sale of new and used machinery [2] - TGCore, another entity involved, was founded in 2019 and focuses on industrial machinery maintenance and wholesale, with significant business overlap with the target company [2] - The transaction is expected to create synergies for the company's existing operations in Malaysia, enhancing operational efficiency and diversifying the business portfolio [3]

Group 1 - The company, Macro Holdings, announced a conditional share subscription agreement with Horizon Construction Development Investment (Hong Kong) Limited for a total indicative cash consideration of 176 million Malaysian Ringgit [1] - The transaction involves the acquisition of 80% of the issued share capital of TH Tong Heng Machinery Sdn. Bhd., which will become a subsidiary of the company upon completion [1] - A shareholders' agreement was established to regulate the affairs of the target company and the rights and obligations of the shareholders, including options for both parties to acquire shares [1] Group 2 - The acquisition and the granting of subscription and put options are strategic measures to enhance the company's market position and operational capabilities in Southeast Asia [2] - The transaction is expected to expand the company's overseas asset base and integrate a mature sales distribution network in Malaysia, providing access to a broad customer base [2] - The deal is anticipated to create synergies with the existing Malaysian operations, improving operational efficiency and diversifying the company's business portfolio [2]