Investment Rating - The investment rating for Far East Horizon (03360) is "Buy" [1] Core Insights - UBS forecasts that Far East Horizon's profit and earnings per share will grow by 8% and 6% respectively this year [1] - The target price for the stock has been raised from HKD 8.8 to HKD 9.1, with a projected price-to-book ratio of 0.72 times and a forecasted dividend yield of 6.5% [1] - Management expects the core financial leasing business operations to remain stable, prioritizing financial stability over growth [1] Financial Performance Expectations - The report maintains an optimistic outlook on the core business prospects, anticipating a rebound in profit growth to high single digits this year [1] - Factors contributing to this growth include moderate loan growth, a deceleration in financing costs leading to a rebound in loan spreads for non-SME loans, increased contributions from SMEs boosting asset return rates, and a low base effect from subsidiary Hongxin Jianfa (09930) [1] - There is also potential for a return to normal levels from the currently high effective tax rate of 50% [1]

Group 1 - UBS forecasts Far East Horizon (03360) to achieve an 8% growth in profit and a 6% increase in earnings per share this year [1] - The target price for the stock has been raised from HKD 8.8 to HKD 9.1, with a projected price-to-book ratio of 0.72 times and a forecasted dividend yield of 6.5% [1] - The investment rating for the stock is "Buy" [1] Group 2 - Management expects the core financial leasing business to remain stable, prioritizing financial stability over growth [1] - A progressive dividend policy will be adopted, although specific payout ratio targets have not been determined [1] - The outlook for the core business is optimistic, with expectations of profit growth returning to high single digits, supported by moderate loan growth and a decrease in financing costs [1] Group 3 - The increase in asset return rates is driven by the improved contribution from small and medium enterprises and the low base effect from the subsidiary Hongxin Jianfa (09930) [1] - There is potential for the currently high effective tax rate of 50% to return to a more normal level [1]

Core Viewpoint - UBS forecasts that Far East Horizon (03360) will see an 8% increase in profit and a 6% increase in earnings per share this year, raising the target price from HKD 8.8 to HKD 9.1, with a target price-to-book ratio of 0.72 and a forecast dividend yield of 6.5% [1] Group 1: Financial Performance - The management expects the core financial leasing business to remain stable, prioritizing financial stability over growth [1] - The company anticipates a rebound in profit growth to high single digits this year, supported by moderate loan growth and a faster decline in financing costs, which will help improve the loan spread for non-SME loans [1] - The contribution from SMEs is expected to enhance asset return rates, alongside the low base effect from subsidiary Hongxin Jianfa (09930) [1] Group 2: Shareholder Returns - The management reiterated a gradual dividend policy but did not specify a target payout ratio [1] - There is potential for the current unusually high effective tax rate of 50% to return to a more normal level, which could positively impact profitability [1]

Group 1 - The core viewpoint of the report indicates that Far East Horizon's management expects stable operations in its core financial leasing business, prioritizing financial stability over growth [1] - The management reiterated a gradual dividend policy without specifying a target payout ratio, indicating a cautious approach to shareholder returns [1] - UBS maintains an optimistic outlook on Far East Horizon's core business prospects, forecasting a rebound in profit growth to high single digits this year, driven by moderate loan growth and a decrease in financing costs [1] Group 2 - The forecast includes an expected increase in profit and earnings per share by 8% and 6% respectively for this year [1] - The target price for Far East Horizon has been raised from HKD 8.8 to HKD 9.1, with a "Buy" rating assigned [1] - Factors contributing to the anticipated growth include the recovery of non-SME loan spreads, increased contributions from SMEs, and a low base effect from the subsidiary Hongxin Jianfa [1]

Core Viewpoint - Citigroup has updated its model following Far East Horizon's announcement of its fiscal year 2025 results, leading to a downward revision of earnings per share forecasts for the next two years by 8% and 10% respectively [1] Group 1 - The target price for Far East Horizon has been slightly increased from HKD 8.5 to HKD 8.6 while maintaining a "Buy" rating [1]

Core Viewpoint - Far East Horizon's 2025 performance met expectations, with a revenue of 35.79 billion yuan, a year-on-year decrease of 5.2%, and a net profit attributable to shareholders of 3.89 billion yuan, a year-on-year increase of 0.67% [1] Revenue & Performance Breakdown - Financing leasing business showed strong performance with revenue of 22.7 billion yuan, a year-on-year increase of 4.5%, accounting for 63% of total revenue; industrial operation revenue was 9.36 billion yuan, a year-on-year decrease of 19%, accounting for 26% [2] - Net profit from industrial operation was 0.147 billion yuan, a year-on-year decrease of 84%, contributing 3.8% to total net profit; net profit from health segment was 0.083 billion yuan, a year-on-year decrease of 64%, contributing 2.1% [2] Financing Leasing - The financing leasing segment experienced growth in both volume and price, with net interest margin expanding to 4.39% compared to 4.0% in 2024; the yield on interest-earning assets was 8.18% [3] - The company reported a decrease in non-performing loan ratio to 1.03%, indicating improved asset quality [3] Hongxin Jianda - Domestic market faced challenges with rental rates declining, leading to a revenue drop of 19.2% to 9.36 billion yuan; net profit fell by 83.6% to 0.15 billion yuan [4] - The company is optimizing its financing structure, with the new borrowing rate decreasing to 2.68% [4] - Hongxin Jianda is expanding its international business, with expectations of a 50% increase in overseas revenue and a 30% increase in net profit in 2026 [4]

Core Viewpoint - The company demonstrated stable performance in 2025, with total revenue and net profit attributable to shareholders reaching 35.785 billion and 3.889 billion yuan, respectively, reflecting a year-on-year change of -5.20% and +0.67% [1]. Revenue Performance - The decline in revenue was primarily due to adjustments in the domestic business of Hongxin Jianda, but the recovery in the financial sector effectively offset this decline [1]. - The company achieved a weighted average ROE of 7.71%, a slight decrease of 0.09 percentage points year-on-year [1]. - The annual dividend was set at 0.56 HKD per share, with a payout ratio of 61%, resulting in a dividend yield of 7.22% as of March 11 [1]. Asset and Income Growth - The scale of interest-earning assets rebounded, driven by inclusive finance, with net interest-earning assets amounting to 272.047 billion yuan, an increase of 4.38% from the previous year [1]. - Inclusive finance interest-earning assets reached 28.179 billion yuan, a significant increase of 63.06% year-on-year [1]. - The average yield on interest-earning assets for 2025 was 8.18%, up 0.12 percentage points year-on-year, benefiting from a higher proportion of inclusive business [1]. Liability Management - The company optimized its liability structure, with interest-bearing liabilities totaling 266.920 billion yuan, a year-on-year increase of 0.76% [2]. - The average cost of liabilities for 2025 was 3.79%, a decrease of 0.27 percentage points year-on-year [2]. - The net interest margin widened to 4.39%, reflecting a year-on-year increase of 0.39 percentage points [2]. Asset Quality - The asset quality continued to improve, with a non-performing asset ratio of 1.03%, down 0.04 percentage points from the previous year [2]. - The proportion of overdue interest-earning assets over 30 days was 0.82%, a decrease of 0.08 percentage points year-on-year [2]. - The provision coverage ratio stood at 227.82%, remaining stable compared to the previous year, indicating prudent provisioning and improving asset quality metrics [2]. Investment Outlook - The company is expected to benefit from its dual customer strategy of "upward attack + downward cultivation" and the collaborative ecosystem of "finance + industry," along with the rapid growth of Hongxin Jianda's overseas business [2]. - Projected net profits attributable to shareholders for 2026-2028 are estimated at 4.061 billion, 4.254 billion, and 4.367 billion yuan, representing year-on-year growth rates of 4.43%, 4.77%, and 2.64%, respectively [2]. - Corresponding price-to-book ratios for March 11 are projected at 0.60, 0.58, and 0.55 [2].

Core Viewpoint - Far East Horizon's performance is below expectations, with a projected revenue decline of 5% to 35.8 billion yuan in 2025 and a slight net profit increase of 1% to 3.9 billion yuan, primarily due to ongoing pressure in the construction and development sector and cautious provisioning amid rapid expansion in inclusive finance [1][2] Financial Performance - Financial business revenue is expected to grow by 4.5% to 22.7 billion yuan in 2025, accounting for 63% of total revenue, driven by a 3% increase in interest income to 21.8 billion yuan and a significant 66% rise in consulting fee income to 900 million yuan [1] - The net interest margin is projected to expand by 34 basis points to 4.83%, with the average asset yield increasing by 4.9 percentage points to 15.71% [1] Industry Operations - The overall industry operations are under pressure, with a projected revenue decline of 18% to 13.3 billion yuan in 2025, and a 6 percentage point decrease in revenue share to 37% [2] - The construction and development segment is expected to see a 19% revenue decline to 9.4 billion yuan, with adjusted net profit dropping by 84% to 150 million yuan, prompting a shift towards overseas markets [2] Profit Forecast and Valuation - The earnings forecast for 2026 has been reduced by 13% to 4.1 billion yuan, with a new forecast for 2027 set at 4.3 billion yuan [2] - The company is currently trading at 0.6x P/B for both 2026 and 2027, with a target price maintained at 8.8 HKD, indicating a potential upside of 15% [2]

Core Viewpoint - The company reported a slight increase in net profit for 2025, driven by stable performance in its financial business, while facing challenges in its industrial operations [1][2]. Financial Business Performance - The net profit attributable to shareholders for 2025 was 3.889 billion HKD, a year-on-year increase of 0.67%, slightly below the expected 4.1 billion HKD [1]. - The net interest margin reached 4.39% in 2025, up from 4.0% in 2024, indicating improved profitability [1]. - The total net amount of interest-earning assets was 272 billion HKD at the end of 2025, representing a growth of 4.38% compared to the end of 2024 [1]. - The non-performing loan ratio improved to 1.03% at the end of 2025, better than the 1.07% recorded at the end of 2024 [1]. Inclusive Finance Business - The inclusive finance segment saw significant growth, with net interest-earning assets reaching 28.179 billion HKD, accounting for 10.4% of total interest-earning assets, up from 6.6% in 2024 [2]. - Interest income from inclusive finance increased by 125.25% year-on-year to 3.541 billion HKD, with an average asset yield of approximately 15.7% [2]. - The company implemented stricter policies for bad debt recognition, resulting in a non-performing asset balance of zero at year-end 2025 [2]. Industrial Operations Challenges - The industrial operations segment faced profitability pressure, with net profit for Hongxin Jianfa dropping by 83.6% to 147 million HKD due to increased domestic competition [2]. - Hongxin Health reported a revenue of 3.572 billion HKD, down 12.7% year-on-year, with net profit declining by 64.3% to 83 million HKD [2]. Dividend Policy - The company declared a dividend per share (DPS) of 0.56 HKD for 2025, with a payout ratio of approximately 61%, indicating a stable dividend foundation [3]. - Future dividend rates are expected to remain stable with potential for increase, despite challenges in industrial operations [3].

Investment Rating - The investment rating for the company is "Buy" (maintained) [3] Core Insights - The company reported a revenue of 35.79 billion yuan in 2025, a year-on-year decrease of 5.2%, while the net profit attributable to shareholders was 3.89 billion yuan, reflecting a slight increase of 0.67% year-on-year [2][3] - The financing leasing business showed strong performance, contributing significantly to revenue, while the industrial operations segment faced challenges, leading to a decline in revenue [7] - The company plans to optimize its financing structure and expand its international business, with expectations of significant growth in overseas revenue and net profit in the coming years [7] Financial Data and Profit Forecast - Revenue and profit forecasts for the years 2024 to 2028 are as follows: - 2024: Revenue 37.75 billion yuan, Net Profit 3.86 billion yuan - 2025: Revenue 35.79 billion yuan, Net Profit 3.89 billion yuan - 2026E: Revenue 37.58 billion yuan, Net Profit 4.21 billion yuan - 2027E: Revenue 40.10 billion yuan, Net Profit 4.73 billion yuan - 2028E: Revenue 43.10 billion yuan, Net Profit 5.22 billion yuan [3][8] - The company expects a net profit growth of 8% in 2026, 13% in 2027, and 10% in 2028 [7] Revenue Breakdown - The revenue breakdown for 2025 shows: - Financing leasing revenue: 22.7 billion yuan, up 4.5% year-on-year, accounting for 63% of total revenue - Industrial operations revenue: 9.36 billion yuan, down 19% year-on-year, accounting for 26% - Health revenue: 3.57 billion yuan, down 13% year-on-year, accounting for 10% [7]