Core Viewpoint - 中银航空租赁（BOCA）reported a net profit of $342 million for 1H25, a 20% year-on-year increase, aligning with Bloomberg's consensus estimate of $337 million [1] - The aviation leasing industry is experiencing a gradual recovery, with aircraft manufacturers increasing production capacity, leading to a 12% year-on-year rise in total aircraft deliveries [1] Supply and Demand - Total aircraft deliveries in 1H25 increased by 12%, with Boeing's deliveries rebounding by 53%, compensating for a 7% decline in Airbus deliveries due to engine shortages [2] - The global new aircraft delivery value is expected to reach $100 billion in 2025, the highest since 2019, and is projected to exceed $141 billion by 2027 [2] - IATA forecasts a 5.8% growth in global Revenue Passenger Kilometers (RPK) in 2025, supporting airline profitability, which is expected to reach $36 billion, up from $32 billion in 2024 [2] Capital Expenditure and Asset Growth - In the context of supply recovery, the company is actively expanding its fleet and optimizing its asset structure, with 24 aircraft deliveries in 1H25 compared to 18 in 1H24, and capital expenditure reaching $1.9 billion, a 150% year-on-year increase [2] - The company announced its largest aircraft order in March, increasing its total order backlog by over 50% to 351 aircraft, with committed capital expenditure of $20 billion [2] - As of the end of 1H25, the company owned 441 aircraft with an average age of 5 years and maintained a 100% utilization rate, indicating a healthy fleet [2] Profitability Improvement - The rental yield for operating leases increased by 50 basis points to 10.3% in 1H25, while the cost of debt remained stable at 4.6% [3] - The net lease yield (NLY) rose by 50 basis points to 7.5%, primarily due to the sale of older, low-yield aircraft and the introduction of higher-yield new models [3] - The company anticipates that the recovery in upstream capacity will facilitate smoother capital expenditure deployment, with rising rental rates expected to enhance asset yield [3] Earnings Forecast and Valuation - The company adjusted its net profit forecasts for 2025, 2026, and 2027 to $710 million, $800 million, and $830 million, respectively, reflecting increases of 0.7%, 1.1%, and 3.2% [3] - The target price has been raised to HKD 85 from HKD 82, based on a price-to-book ratio of 1.13x for 2025E [3] - The company's stock is currently trading at 0.96x 2025E PB and offers a 3.9% dividend yield, indicating potential investment value [3]

Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The company's net profit after tax for 1H25 was USD 342 million, a year-on-year increase of 20%, aligning closely with Bloomberg's consensus estimate of USD 337 million [1] - The aviation leasing industry is gradually improving, with aircraft manufacturers' production capacity starting to recover, leading to a 12% year-on-year increase in total aircraft deliveries [2] - The company is expected to benefit from rising rental prices and market values due to the ongoing supply-demand imbalance in the aircraft leasing market [1][2] Summary by Sections Financial Performance - In 1H25, the company's capital expenditure increased by 150% year-on-year to USD 1.9 billion, the highest semi-annual figure since 2020 [3] - The net lease yield (NLY) improved by 50 basis points year-on-year to 7.5%, driven by the sale of older, low-yield aircraft and the introduction of higher-yield new models [4] Market Outlook - The global demand for air travel is expected to continue recovering, with IATA projecting a 5.8% increase in global RPK for 2025, supporting the leasing market [2] - The report anticipates that the total value of new aircraft deliveries globally will reach USD 100 billion in 2025, the highest since 2019 [2] Capital Expenditure and Growth - The company has a total aircraft order reserve of 351 aircraft, with committed capital expenditure reaching USD 20 billion [3] - The company aims to achieve an asset scale growth target of USD 40 billion by 2030 [3] Profitability Forecast - The report adjusts the forecast for net profit attributable to the parent company for 2025, 2026, and 2027 to USD 710 million, USD 800 million, and USD 830 million respectively, with target price raised to HKD 85 [5][6]

Core Viewpoint - 中银航空租赁（BOCA） reported a slight increase in aircraft deliveries in 2Q25, with a total of 13 aircraft delivered compared to 11 in 1Q25, while the total number of owned aircraft decreased to 441 due to the sale of 14 aircraft [1][2] Group 1: Operational Performance - In 2Q25, BOCA executed 75 transactions, including the delivery of 13 aircraft and the sale of 14 aircraft, resulting in a net decrease of 1 owned aircraft [2] - The company maintains a strong order book with 351 aircraft on order, supporting long-term growth despite a decrease in owned aircraft [2] - The utilization rate of the fleet remains stable at 100%, with an average remaining lease term of 7.9 years [2] Group 2: Market Conditions - The recovery of upstream aircraft manufacturers' production capacity is a positive signal, with Boeing and Airbus delivering a total of 320 aircraft in 2Q25, up from 266 in 1Q25 [1] - Despite improvements in aircraft supply, demand for air travel continues to rise, with global revenue passenger kilometers (RPK) increasing by 5% year-on-year in May, indicating ongoing pressure on aircraft availability and rental rates [2] Group 3: Financial Outlook - The company expects a core ROE of 10.6% for 2025, roughly in line with 10.5% in 2024, reflecting stable operational performance [1][2] - Profit forecasts for 2025, 2026, and 2027 are maintained at USD 700 million, USD 790 million, and USD 800 million respectively, with a target price of HKD 82 based on a price-to-book ratio of 1.06x for 2025 [3]