Core Insights - The company reported a significant increase in revenue for the first three quarters of 2025, achieving 40.284 billion yuan, a year-on-year growth of 60.58% [1] - Despite the revenue growth, the company experienced a net loss attributable to shareholders of 1.372 billion yuan, a shift from profit compared to the previous year [1] - Excluding the impact of goodwill impairment from the sale of container assets, the net profit for the first three quarters was 1.904 billion yuan, reflecting a year-on-year increase of 19.75% [1] Revenue Performance - The company’s revenue growth for the first three quarters of 2025 was 60.58%, with a notable increase in Q3 revenue of 11.824 billion yuan, up 32.73% year-on-year and 4.24% quarter-on-quarter [2] - The revenue growth was driven by fleet expansion and a favorable industry environment, alongside continued high aircraft sales compared to the previous year [2] - In Q3 2025, the company sold 15 aircraft, an increase of 4 aircraft year-on-year but a decrease of 5 aircraft quarter-on-quarter [2] Cost and Profit Analysis - The operating cost for Q3 2025 was 10.926 billion yuan, representing a year-on-year increase of 46.20% [3] - The net profit attributable to shareholders for Q3 2025 was 646 million yuan, a decrease of 26.03% year-on-year, but a recovery from losses in the previous quarter [2] Fleet Expansion and Industry Outlook - As of the end of Q3 2025, the company had a total of 601 owned, 36 managed, and 522 ordered aircraft, showing growth in fleet size despite significant aircraft sales [4] - The company has placed an order for 90 additional aircraft from Airbus, with an option for 40 more, expected to be delivered by the end of 2033 [4] - The overall industry remains robust, with Boeing and Airbus delivering an average of 105 aircraft per month and holding 159 aircraft orders, indicating sustained high industry demand [4] Investment Recommendation - The company maintains a "buy" rating based on the ongoing positive outlook for the aircraft leasing industry, with projected revenues of 47.1 billion, 38 billion, and 41.1 billion yuan for 2025-2027, reflecting growth rates of 22.54%, -19.24%, and 7.96% respectively [5] - The net profit forecasts for the same period are -100 million, 1.7 billion, and 2.4 billion yuan, with a significant expected growth rate of 39.28% over three years [5]

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 91.70 based on a projected PB of 1.20x for 2025 [5][3]. Core Views - The aircraft leasing industry is experiencing upward momentum due to a supply-demand gap driving aircraft values and rental rates higher, with sustained strong demand for leasing [1][2]. - The company has a strong fleet management capability, with a management team that has extensive experience in banking, leasing, and aviation, allowing it to effectively navigate cyclical risks in the aviation industry [1][2]. - The company benefits from a significant cost advantage in financing due to its backing by the Bank of China, maintaining a high credit rating and lower bond yield spreads compared to peers [2]. Summary by Sections Supply-Demand Dynamics - Aircraft manufacturers are facing production capacity constraints due to supply chain issues, skilled labor shortages, and material supply disruptions, leading to longer delivery times and a tight supply situation [13][14]. - Global air passenger demand continues to grow, with strong load factors reported, indicating robust market conditions for aircraft leasing [19][21]. - The limited availability of aircraft for leasing is driving up market values and rental rates, with new aircraft rental rates surpassing pre-pandemic levels [24][31]. Company Strengths - The company has maintained profitability for 31 consecutive years since its establishment, demonstrating resilience and strong operational capabilities [40]. - The management team has an average of over 26 years of experience, which is crucial for navigating the cyclical nature of the aircraft leasing industry [47][48]. - The fleet has been steadily expanding, with a focus on mainstream aircraft types, and the company has a significant order backlog, ensuring future growth [55][60]. Financial Performance and Projections - The company is projected to achieve revenues of USD 2.533 billion in 2025, with a slight decline of 0.9% year-on-year, followed by growth in subsequent years [4][3]. - Net profit is expected to be USD 699 million in 2025, reflecting a decrease of 24.31% year-on-year, but with a recovery anticipated in the following years [4][3]. - The company’s financing costs are expected to improve due to a significant portion of its debt being floating rate, which may benefit from potential interest rate cuts by the Federal Reserve [2][3].