远东宏信（03360）：远东宏信（3360HK）：金融业务稳健支撑丰厚分红

Investment Rating - The report maintains a "Buy" rating for the company [7] Core Insights - The company recorded a net profit attributable to shareholders of 3.889 billion RMB in 2025, a slight increase of 0.67% year-on-year, which is slightly below the expected 4 billion RMB [1] - The financial business showed steady performance with a recovery in interest-earning asset scale, ending 2025 with a net interest-earning asset of 272 billion RMB, a growth of 4.38% compared to the end of 2024 [2] - The asset quality continued to improve, with a non-performing loan ratio of 1.03% at the end of 2025, better than the 1.07% at the end of 2024 [2] - The net interest margin reached 4.39% in 2025, up from 4.0% in 2024, supported by the rapid expansion of inclusive finance business [2] - The company plans to maintain a stable dividend payout ratio, with a dividend per share (DPS) of 0.56 HKD for 2025, representing a payout ratio of approximately 61% [5] Financial Business Summary - The net interest margin/net interest yield for 2025 was 4.39%/4.83%, compared to 4.00%/4.48% in 2024 [2] - The asset yield increased from 8.06% in 2024 to 8.18% in 2025, benefiting from a diversified financing strategy and steady expansion of inclusive finance [2] - The company achieved a significant growth rate of 63.1% in the inclusive finance business, which now accounts for 10.4% of total interest-earning assets [3] Inclusive Finance Business Summary - The inclusive finance business saw a net interest-earning asset of 28.179 billion RMB in 2025, contributing 3.541 billion RMB in interest income, a year-on-year increase of 125.25% [3] - The company has established over 80 business outlets and served more than 30,000 clients in economically developed regions [3] - The company implemented stricter policies for identifying and writing off non-performing assets, resulting in a year-end balance of zero non-performing assets on the balance sheet [3] Industrial Operations Summary - The industrial operations segment faced challenges, with net profits for Hongxin Jianfa and Hongxin Health declining by 84% and 64% respectively [4] - The company is transitioning from a disease-centered approach to a health-centered strategy, aiming to enhance its medical capabilities and expand into consumer health [4] Dividend and Valuation Summary - The target price for the company is set at 8.90 HKD, based on a discounted cash flow (DCF) valuation method [12] - The estimated net profit attributable to shareholders for 2026 and 2027 is adjusted to 4 billion RMB and 4.2 billion RMB, reflecting a decrease of 17% and 19% respectively [5]