BOC AVIATION(HK:02588) Zhi Tong Cai Jing·2025-08-22 02:17Core Viewpoint - Company maintains its profit forecast for China Aircraft Leasing Group (02588) with a target price of HKD 81.40, indicating a potential upside of 13% based on projected P/B ratios for 2025 and 2026 [1] Group 1: Financial Performance - In 1H25, the company's revenue increased by 6% year-on-year to USD 1.24 billion, while net profit decreased by 26% to USD 342 million, primarily due to a one-time impact from the return of two Russian aircraft [1] - Excluding this impact, the company's core net profit grew by 20% year-on-year, aligning with expectations [1] Group 2: Operational Metrics - The company delivered a total of 24 aircraft in 1H25, an increase of 6 aircraft year-on-year and 4 aircraft quarter-on-quarter, with capital expenditures reaching a five-year high of USD 1.9 billion, up 138% year-on-year [2] - The operating lease fleet's net book value increased by 1% to USD 18.2 billion, while the total fleet size rose by 2% to USD 22.2 billion [2] - The rental yield improved, with the net leasing yield increasing by 0.5% year-on-year to 7.5% [2] Group 3: Growth Potential - The company signed its largest aircraft order in history during 1H25, with the order book increasing by 132 aircraft year-on-year to 351 aircraft, representing a capital expenditure of approximately USD 20 billion [3] - The company aims to reach total assets of USD 40 billion by 2030, with a projected CAGR of 8% from 2024 to 2035 [3] - The fleet maintains a 100% utilization rate, with an average age of 5 years and an average remaining lease term of 7.9 years, indicating a strong and predictable rental income stream [3] Group 4: Financing Costs - The company's funding cost remained stable at 4.6% year-on-year, with total debt increasing by 2% [4] - The company is expected to benefit from potential reductions in short-term interest rates, particularly for its 32% floating-rate debt, which is the highest among listed leasing companies [4]