BOC AVIATION(HK:02588) Orient Securities·2024-08-21 00:40Investment Rating - The report maintains a "Buy" rating for the company, with a target price raised to 80.33 HKD [5][3]. Core Insights - The company achieved a revenue of 1.174 billion USD in 1H24, representing a year-on-year increase of 10.67%, and a net profit of 460 million USD, up 75.87% YoY [2][10]. - The aircraft utilization rate was 99.1% in 1H24, with a debt cost of 4.6%, an increase of 0.7 percentage points YoY, while rental yield and net leasing yield remained low at 9.75% and 7.00% respectively [2][10]. - The company completed capital expenditures of 800 million USD in 1H24, a decrease of 50% YoY, with a committed capital expenditure of 1.9 billion USD for 2H24 [2][10]. - The average remaining lease term decreased from 8.6 years at the end of 2020 to 7.9 years in 1H24, while the average fleet age increased from 3.5 years to 4.9 years [2][10]. Summary by Sections Financial Performance - In 1H24, the company reported operating income of 1.174 billion USD, with rental income of 927.74 million USD (down 1.31% YoY), interest and fee income of 132.31 million USD (up 118.71% YoY), and aircraft disposal gains of 55.87 million USD (up 300.72% YoY) [10][2]. - The annualized ROE for 1H24 was 15.58%, and the net profit margin was 39.18% [2][10]. Operational Metrics - The company’s active fleet increased by 3 aircraft to 429, with 19 aircraft delivered and 15 sold in 1H24 [2][10]. - The order book consists of 219 aircraft, a decrease of 5 from the beginning of the year, but has doubled from 104 aircraft at the end of 2021 [2][10]. - New lease commitments totaled 55 in 1H24, an increase of 10 YoY [2][10]. Future Outlook - The company’s EPS forecasts for 2024 and 2025 have been adjusted to 1.12 and 1.11 USD respectively, with a new forecast for 2026 set at 1.25 USD [3][5]. - The historical valuation method suggests a 2024 PE of 9.20x, indicating a stable outlook for the company [3][5].