BOC AVIATION(HK:02588) HTSC·2024-07-09 01:02Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 78, based on a 1.1x 2024E price-to-book (PB) ratio and a projected book value per share (BVPS) of USD 9.07 [2][10]. Core Insights - The company reported a stable operational performance with an increase in owned aircraft to 429 by the end of Q2 2024, maintaining a utilization rate of 99% [2][3]. - The company successfully issued a five-year USD 500 million bond at the narrowest spread in its history, reflecting strong financing capabilities [2]. - The leasing market continues to experience a supply-demand imbalance, which is expected to drive up leasing rates and aircraft values, supporting the company's core profit growth [2][4]. - The forecasted net leasing yield and core return on equity (ROE) for 2024 are expected to be at least equal to those of 2023, with a projected core ROE of 10.3% [2][10]. Financial Projections - The company’s projected net profit for 2024 is USD 719.2 million, with estimates of USD 7.2 billion, USD 7.5 billion, and USD 8.2 billion for 2024, 2025, and 2026 respectively [2][5]. - Revenue is expected to grow from USD 2.461 billion in 2023 to USD 2.502 billion in 2024, reflecting a modest increase of 1.65% [5]. - The company’s earnings per share (EPS) is projected to be USD 1.04 for 2024, with a price-to-earnings (PE) ratio of 6.98 [5]. Operational Highlights - In Q2 2024, the company executed 59 operations, including the delivery of 13 aircraft and the sale of 11 aircraft, while maintaining a healthy average aircraft age of 4.9 years and an average remaining lease term of 7.9 years [3][4]. - The company serves 93 airlines across 47 countries and regions, showcasing its global operational capabilities [3].