Core Viewpoint - The company reported a strong financial performance for 2024, with significant growth in both revenue and profit, alongside a robust dividend payout [2][3]. Financial Performance - The company achieved a revenue of 5,203.8 million HKD in 2024, representing a year-on-year growth of 9.2% [2]. - The profit attributable to shareholders reached 257.5 million HKD, showing an increase of over 800% compared to the previous year [2]. - A final dividend of 0.18 HKD per share was proposed, bringing the total dividend for the year to 0.30 HKD per share, including an interim dividend of 0.12 HKD [2]. Leasing Business Development - Total leasing income from financing and operating leases amounted to 4,349.7 million HKD, reflecting a year-on-year increase of 3.6% [3]. - The average rental yield for financing leases was 7.5%, while for operating leases it was 11.2%, with respective year-on-year changes of -5.7 and -0.2 percentage points [3]. - The weighted average rental yield decreased to 11.1%, down by 0.3 percentage points, primarily due to the sale of high-yield financing lease aircraft in Q4 2023 [3]. Aircraft Transactions - The company signed new leasing agreements or reached leasing intentions for a total of 48 aircraft in 2024, including new deliveries and renewals [4]. - A record number of 50 aircraft sale agreements were signed, with 25 owned aircraft and 2 managed aircraft successfully sold [4]. - A significant transaction with Dubai Aerospace Enterprise (DAE) involved a package of 17 aircraft, marking one of the largest aircraft transactions of the year [4]. Fleet and Orders - As of the end of 2024, the company operated a fleet of 189 aircraft, consisting of 159 owned and 30 managed aircraft, with 90% of the owned fleet being narrow-body aircraft [5]. - The average age of the owned fleet was 8.5 years, with an average remaining lease term of 6.1 years [5]. - The company holds 124 aircraft on order, including 97 Airbus and 27 COMAC aircraft, representing over 70% of the owned fleet size [5].

Investment Rating - The report provides a positive outlook on several sectors, particularly in chemicals, aviation, and refrigerants, indicating potential investment opportunities in leading companies like Baofeng and Wanhua [3][8]. Core Insights - The chemical sector has been in a downward cycle for over three years, but a significant decline in capital expenditure is expected in 2025, which may stabilize demand due to supportive domestic policies [3][5][6]. - The refrigerant sector is performing well, with rising market prices and expected profit increases in the second quarter [9]. - The aviation sector shows signs of recovery, with improving ticket prices and demand expected to rise during holiday periods [13][14]. - Companies like Manbang and China Civil Aviation Information Network are highlighted for their strong performance and optimistic growth forecasts [15][17]. Summary by Sections Chemical Sector - The chemical sector has faced a prolonged downturn, but capital expenditure is expected to decrease significantly in 2025, leading to a potential end to rapid capacity growth [3][5]. - Domestic demand is stabilizing as the real estate market's drag diminishes, supported by policies aimed at boosting consumption [6]. - High upstream energy costs, particularly for crude oil, continue to pressure midstream chemical companies, but a potential adjustment in oil prices could present investment opportunities [7][8]. Refrigerant Sector - The refrigerant market has shown strong performance, with both market and long-term prices on the rise, leading to improved profits for companies in this sector [9]. Aviation Sector - Recent trends indicate a recovery in the aviation sector, with domestic ticket prices showing a narrowing decline and expected demand increases during holiday seasons [13]. - Boeing's limited capacity recovery continues to tighten global aircraft supply, benefiting the aircraft leasing industry [14]. Company Performance - Manbang's performance exceeded expectations, with projected compound profit growth of over 30% for 2025 and 2026, supported by strong online transaction capabilities [15][16]. - China Civil Aviation Information Network is expected to see optimistic growth in 2025, with a low valuation and potential for value appreciation [17][18]. Fiberglass Sector - The fiberglass industry is experiencing demand growth driven by wind power and consumer electronics, with leading companies maintaining strong pricing power [19][20]. Cement Sector - The cement sector shows signs of recovery with improved shipment rates and stable demand, particularly in southern markets, suggesting potential for price increases [21]. Glass Industry - The float glass industry faces challenges but is seeing marginal improvements in production and sales rates, with specific companies like Xinyi Glass highlighted for their competitive advantages [22]. Non-Ferrous Metals - The non-ferrous metals market, particularly copper and aluminum, is experiencing upward trends due to supply constraints and increasing demand, indicating a potential reversal in market conditions [26]. Titanium Industry - The titanium industry is poised for growth due to strong domestic demand and reduced import supply, with companies like Hunan Gold being recommended for investment [27]. Bond Market Outlook - The bond market is expected to experience a downward trend in yields as monetary policy becomes more accommodative, indicating a favorable environment for bond investments [32].

Investment Rating - The report maintains a "Buy" rating for China Aircraft Leasing Group Holdings Limited (02588) [1] Core Views - The company reported a total revenue of USD 2.56 billion for 2024, a year-on-year increase of 4%, and a net profit of USD 924 million, up 21% year-on-year, marking a historical high [3] - The core net profit, excluding the impact of the write-down of Russian aircraft, was USD 633 million, reflecting a 16% year-on-year increase [3] - The company faces challenges in aircraft delivery due to supply chain issues, which may affect core rental income [4] - The aviation industry is experiencing a strong recovery, with a projected CAGR of 5.1% for passenger demand in the Asia-Pacific region over the next 20 years, significantly higher than North America and Europe [4] - The company benefits from a young fleet and a favorable remaining lease term compared to peers, positioning it well to capitalize on growth in the Asia-Pacific aviation market [4] Financial Data and Earnings Forecast - The company expects revenues to grow from USD 2.46 billion in 2023 to USD 2.82 billion by 2027, with a projected net profit of USD 671 million in 2025, increasing to USD 754 million by 2027 [4][5] - The financial cost is projected to be 4.5% in 2024, with a slight increase in new bond issuance costs due to the Federal Reserve's interest rate policies [4] - The company’s net asset return is expected to remain strong, with a projected return on equity of 10.2% from 2025 to 2027 [4]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a total revenue of USD 2.56 billion for 2024, a year-on-year increase of 4%, and a net profit of USD 924 million, up 21% year-on-year, marking a historical high [5] - The core net profit, excluding the impact of the write-down of Russian aircraft, was USD 633 million, reflecting a 16% year-on-year increase [5] - The company faces challenges in aircraft delivery due to supply chain issues, which may affect core rental income [6] - The aviation industry is experiencing a strong recovery, with a projected CAGR of 5.1% for passenger demand in the Asia-Pacific region over the next 20 years, significantly higher than North America and Europe [6] - The company benefits from a young fleet and a high remaining lease term, which positions it well to capitalize on the growth in the Asia-Pacific aviation market [6] Financial Data and Earnings Forecast - The company expects revenues to grow from USD 2.56 billion in 2024 to USD 2.82 billion by 2027, with net profits projected to decline to USD 671 million in 2025 before recovering to USD 754 million by 2027 [6][7] - The financial forecast includes a decrease in net profit estimates for 2025 and 2026 due to anticipated delivery issues and rising funding costs [6] - The company’s net asset return is expected to remain stable, with a projected return on equity of around 10.2% from 2025 to 2027 [6] Company Insights - The company has a fleet of 709 aircraft, with 445 owned, achieving a utilization rate of over 99% [6] - The average age of the fleet is 5.0 years, significantly younger than the global average of 15 years, which enhances its competitive position [6] - The company sold 29 aircraft in 2024 and signed 118 new lease commitments, indicating active fleet management [6] - The company’s order book stands at 232 aircraft, reflecting strong demand despite delivery challenges [6]

Financial Data and Key Metrics Changes - The company reported a net profit after tax of $924 million for the year ended 2024, an increase from $764 million in 2023, representing a 21% growth [4] - Total revenues and other income rose 4% to $2.6 billion for 2024, with operating cash flow net of interest reaching a record $1.9 billion [5][21] - The total assets at year-end were $25.1 billion, with net assets per share increasing by 11% to $9.07 [5][23] - The company declared a final dividend of $0.267 per share, leading to a total dividend of $0.40 per share for 2024, a 21% increase from 2023 [4] Business Line Data and Key Metrics Changes - The operational lease rental income was $1.8 billion, supported by a stable lease rate factor of 10% [21] - Finance lease revenue increased by $148 million to $270 million, with finance lease receivables rising 50% from year-end 2023 to $3.7 billion [21] - Gains on aircraft sales increased by over 50% to $180 million, with 29 aircraft sold compared to 20 in the previous year [21][17] Market Data and Key Metrics Changes - Airline traffic supporting demand for aircraft grew over 10% in 2024, with all regions reporting traffic growth and profitability [5] - The global airline earnings are expected to remain strong, with forecasts of $36.6 billion in profits for 2025 [5] - The requirement for new aircraft financing is anticipated to rise to $100 billion in 2025, a 30% increase from 2024 [9] Company Strategy and Development Direction - The company is focusing on larger value lease transactions and building its delivery pipeline in major markets, despite supply-side shortages affecting aircraft and engine availability [6][7] - The order book remains strong with 232 aircraft, reflecting the demand for new technology aircraft types [14] - The company aims to maintain its position as predominantly an aircraft operating lease company while also expanding its finance lease assets [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth in aircraft assets, with a record market value premium to net book value [26] - The challenges related to supply chain disruptions are expected to ease but will persist to some extent for several years [26] - The anticipated increase in aircraft deliveries and production rates is expected to support growth in the leasing business [51] Other Important Information - The company achieved full recovery of $507 million written down in 2022 related to Russia-based aircraft [10][11] - Changes in senior management were noted, with new appointments aimed at enhancing operational efficiency [11] Q&A Session Summary Question: What is your aircraft delivery pipeline looking like for 2025? - The company has 47 aircraft contracted for delivery in 2025 and expects to add more as the year progresses [30][31] Question: What is the outlook for net yield given interest rate fluctuations? - Management indicated that net lease yield should improve due to higher lease rates from new aircraft deliveries and the expiration of low-yield leases from the pandemic [36][38] Question: How much of your fleet is still tied to below-market leases from the pandemic? - Approximately 13% to 14% of the fleet is still on those leases, with anticipated uplifts of 30% to 40% when remarketed [42][43] Question: What is the expected CapEx for 2025? - The company is guiding for a similar CapEx to last year, with expectations of $4 billion [46][49] Question: How does the global engine issue impact operations? - The impact from engine durability issues has been limited, with improvements expected from new engine programs in the coming years [60][61]