Core Viewpoint - The report from Guojin Securities forecasts that the net profit attributable to the parent company of China Ship Leasing (03877) will be HKD 2.16 billion, HKD 2.30 billion, and HKD 2.48 billion for the years 2025-2027, with year-on-year growth rates of 3%, 6%, and 8% respectively. The lower profit growth in 2025 is attributed to the completion of certain financing leasing and loan projects, leading to a decline in related income, and a tax expense of HKD 140 million due to the retrospective application of the second pillar framework starting in 2025. The company is characterized by counter-cyclical investment capability, leading operational ability, low funding costs, and a high dividend payout ratio (approximately 40%), with a projected dividend yield of about 7% at the current price. A target price of HKD 2.64 is set based on a 1x PB for 2026, with an initial "Buy" rating assigned [1]. Group 1: Diverse Business Structure - As of the first half of 2025, the company's revenue breakdown from operating leasing, financing leasing, loan borrowing, and ship brokerage is 60%, 27%, 12%, and 1% respectively. The company primarily focuses on long-term leasing, providing revenue growth certainty. The net asset value of the company's ship assets and the scale of receivables from leasing are projected to grow at a compound annual growth rate (CAGR) of 20% from 2020 to 2024. The estimated operating leasing yield and financing leasing yield for 2024 are 14.4% and 7.8% respectively. In addition to long-term leases, the company utilizes its professional industry knowledge to operate some self-owned and joint venture ships in the spot and short-term markets, contributing approximately 30% to profits from 2021 to 2024 [1]. Group 2: Leading Operational Capability - The company's fleet is characterized by diversity, high value, and youthfulness, with a fleet size of 143 vessels as of the first half of 2025. According to Clarkson data, as of September 2025, the company's ship asset value ranks 7th among Chinese leasing companies and 2nd among non-bank leasing companies. The company is one of only four Chinese shipping leasing companies covering all ship types. The company is also leading in green transformation, with 91% of its vessels being energy-efficient as of September 2025, ranking 2nd among the top ten leasing companies in terms of vessel quantity. The average age of the fleet is 4.13 years, lower than comparable peers, and new ships generally comply with environmental policies, resulting in lower maintenance costs and strong appeal to high-quality customers [2]. Group 3: Low Funding Costs - The company has a high credit rating, with Fitch and S&P both rating it A- as of the first half of 2025. The average funding cost is 3.1%, which is below the industry level. With the Federal Reserve expected to cut interest rates three times in 2025, and the majority of the company's liabilities denominated in USD, the average funding cost is anticipated to decline further [3].