Core Viewpoint - CICC has downgraded the earnings forecast for Far East Horizon (03360) for 2026 by 13% to 4.1 billion HKD, while introducing a forecast of 4.3 billion HKD for 2027, citing ongoing operational pressures and increased provisions due to the expansion of inclusive finance business [1][9]. Financial Performance - Far East Horizon's revenue for 2025 is expected to decline by 5% to 35.8 billion HKD, with net profit attributable to shareholders increasing by 1% to 3.9 billion HKD, reflecting a slight underperformance against expectations due to pressures on the construction and development segment and cautious provisioning amid rapid expansion of inclusive finance [2][10]. - The company's financial business revenue is projected to grow by 4.5% to 22.7 billion HKD in 2025, accounting for 63% of total revenue, driven by a 3% increase in interest income to 21.8 billion HKD and a 66% rise in consulting fee income to 0.9 billion HKD [3][11]. - The net interest margin is expected to expand by 34 basis points to 4.83%, with the average asset yield increasing by 4.9 percentage points to 15.71% [3][12]. Industry Operations - The overall performance of the industry remains under pressure, with the operational revenue expected to decline by 18% to 13.3 billion HKD, representing a 6 percentage point decrease in revenue share to 37% [4][13]. - The construction and development segment is anticipated to see a 19% drop in revenue to 9.4 billion HKD, with adjusted net profit decreasing by 84% to 0.15 billion HKD, prompting a strategic shift towards overseas markets where revenue is expected to increase by 360% [6][13]. - The health segment is projected to experience a 13% decline in revenue to 3.6 billion HKD, with net profit down by 64% to 0.08 billion HKD, as the company continues to upgrade its strategic focus towards a "medical + health" integrated service model [6][13].
中金：维持远东宏信跑赢行业评级 目标价8.8港币