BOC AVIATION(HK:02588)2024-08-16 06:43Investment Rating - The report maintains a "Buy" rating for China Aircraft Leasing Group Holdings Limited (中银航空租赁) [2] Core Views - The company reported strong performance in 1H24, with total revenue of USD 1.174 billion, a year-on-year increase of 11%, and a net profit of USD 460 million, up 76% year-on-year [2] - The company has a robust order book with 219 aircraft scheduled for delivery until the end of 2029, which is expected to support future earnings growth [2][3] - The net leasing yield is anticipated to remain stable or increase due to strong industry demand and limited supply, with a current yield of 7% [3] - The expectation of a Federal Reserve interest rate cut may reduce the company's financial costs, enhancing profitability [3] - The Asia-Pacific region is identified as a key growth area for air passenger demand, contributing significantly to the company's revenue [3] Summary by Sections Financial Performance - In 1H24, the company achieved total revenue of USD 1.174 billion, a year-on-year increase of 11%, and a net profit of USD 460 million, reflecting a 76% increase year-on-year [2][4] - The company’s fleet consisted of 680 aircraft at the end of 1H24, with a utilization rate of 99% for owned aircraft [2][3] Market Position and Strategy - The company has a young fleet with an average age of 4.9 years and a remaining lease term of 7.9 years, which positions it well in the market [2] - The order book includes 55 new leasing commitments, indicating strong future revenue potential [2][3] Earnings Forecast - The earnings forecast for 2024-2026 has been adjusted, with expected net profits of USD 783 million, USD 771 million, and USD 822 million respectively [3][4][6] - The company’s financial costs are projected to decrease due to anticipated interest rate cuts, which will positively impact profitability [3]