Core Conclusion - Far East Horizon Limited, listed on the Hong Kong Stock Exchange in 2011, has evolved into a comprehensive group with financial services as its "shield" and industrial operations as its "spear" [1] - The company's subsidiary, Hongxin Jianda, successfully listed on the Hong Kong Stock Exchange in 2023, becoming China's largest equipment operation service provider [1] - The company is optimistic about its stable leasing investment and decreasing cost of liabilities, as well as the net profit expansion of its industrial operations under its overseas strategy, initiating coverage with a "Buy" rating [1] Business Segments - Far East Horizon's main business encompasses two segments: financial services and industrial operations, with financial services centered on leasing and diversified innovative financial services [1] - The industrial operations segment includes equipment operations led by Hongxin Jianda and hospital operations led by Hongxin Health [1] - The revenue structure shows a rapid increase in the share of industrial operations, projected to account for 42.71% of total revenue in 2024, up 4.03 percentage points year-on-year, reflecting the effectiveness of the "finance + industry" dual-driven development strategy [1] Financial Services - The financial services segment has maintained stable growth in interest-earning assets while enhancing compliance and risk control measures [1] - The expansion of inclusive finance and the decline in cost of liabilities are expected to further widen the interest margin [1] Industrial Operations - The industrial operations segment integrates industry and finance, leveraging resource and business synergies [1] - Hongxin Jianda is actively pursuing overseas business expansion, achieving steady revenue growth, while Hongxin Health has established 26 private hospitals focusing on under-resourced third and fourth-tier cities, creating a unique hospital network [1] Asset Quality and Risk Management - The company has optimized its asset structure, leading to significant improvements in asset quality while maintaining stability [2] - A prudent project investment strategy has been implemented to strictly control the quality of new business and reduce the scale of urban public projects, effectively controlling the generation of non-performing assets [2] - The non-performing asset formation rates for 2023-2025H are projected at 0.50%, 0.43%, and 0.23%, with non-performing asset provision coverage ratios at 240%, 228%, and 227% respectively [2]

Investment Rating - The report initiates coverage on Far East Horizon with an "Accumulate" rating [1][6][19] Core Views - Far East Horizon has evolved from being the first listed financing leasing company in China to a comprehensive group with financial services as its "shield" and industrial operations as its "spear" [1][23] - The company is expected to benefit from stable leasing investment and a decrease in funding costs, alongside profit expansion in its industrial operations due to its overseas strategy [1][19] Summary by Sections Company Overview - Established in 2011, Far East Horizon is the first listed financing leasing company in China, now a comprehensive group integrating financial and industrial services [1][23] - The company has undergone several phases of development, transitioning from a traditional leasing company to a comprehensive service provider [24][25] Financial Performance - The revenue structure is shifting towards industrial operations, which are projected to account for 42.71% of total revenue by 2024, reflecting a 4.03 percentage point increase year-on-year [2] - The company has maintained stable growth in its financial services, with a focus on compliance and risk control, while also expanding its inclusive finance business [2][54] Business Segments - The financial services segment remains the core, with leasing as the primary focus, while the industrial operations segment includes equipment and healthcare services [40] - The equipment operation segment has shown significant growth, with revenue increasing from 1.8 billion in 2018 to 11.6 billion in 2024, reflecting a CAGR of 36.54% [46] Asset Quality - Far East Horizon has improved its asset quality significantly, with non-performing asset formation rates projected to be 0.50%, 0.43%, and 0.23% for 2023, 2024, and 2025H respectively [3][32] - The company has implemented a prudent project investment strategy to control the quality of new business and reduce the scale of urban public projects [3] Profit Forecast and Valuation - The forecasted total revenue for 2025-2027 is 376.10 billion, 375.77 billion, and 384.89 billion respectively, with a slight decline in growth rates expected [15] - The report anticipates a rebound in net profit margins, with projected net profits of 40.51 billion, 42.32 billion, and 44.30 billion for the same period [15][19]

Core Insights - The Guangzhou Development Zone and Huangpu District are promoting the "Low Altitude Economy and Aerospace Industry" through a series of supportive measures aimed at high-quality development [1][2][3] Group 1: Policy Measures - The "Low Altitude and Aerospace 11 Measures" includes financial incentives, with individual clauses offering up to 30 million yuan for companies obtaining key aviation certifications [3] - Specific subsidies include up to 10 million yuan for project establishment, 600,000 yuan annually for infrastructure participation, and 300,000 yuan for operational support of demonstration projects [3][4] - The policies aim to enhance the entire low-altitude industry chain, focusing on project attraction, infrastructure, talent training, and technical breakthroughs [2][3] Group 2: Industry Development - The low-altitude economy has attracted over 50 key enterprises, generating an output value of approximately 15 billion yuan, covering the entire industry chain from R&D to operation [2][4] - The establishment of a dedicated office for low-altitude economy and aerospace development indicates a strategic focus on these emerging industries [2] - The region aims to gather over 100 low-altitude enterprises by the end of the year, leveraging a combination of new infrastructure and financial support [4] Group 3: Financial Innovations - A significant financial innovation is the listing of a low-altitude economic asset-backed securities (ABS) plan with a total issuance scale of 584 million yuan, aimed at supporting the development of the low-altitude economy [5] - This financial initiative is expected to enhance the region's ability to attract investment and support the growth of emerging companies in the low-altitude sector [5] Group 4: Application Scenarios - New application scenarios are being realized, such as the launch of bonded logistics air routes that reduce transportation time by 50% and save at least 10% in costs [4] - Companies like Guangzhou New Aviation Technology Co. and Jilei Electric Science and Technology are leading in their respective niches within the low-altitude economy, contributing to the sector's growth [4]