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 250 million zero-coupon bond due in 2026[166][167] - The net proceeds from the 296.6 million, with a net conversion price of approximately HK250 million bond issuance were approximately 10.01 per share[167] - As of December 31, 2023, the outstanding principal amount of the 290 million after a 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
远东宏信(03360) - 2023 - 年度业绩