External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Credit

<ul>
<li>Leasing companies in China can be broadly classified into 2 categories: commercial leasing companies and financial leasing companies.</li>
<li>Financing leasing companies enjoy lower funding costs than that of commercial leasing companies given their more diversified funding channels and more stringent regulatory requirements.</li>
<li>Hence, the RV analysis should also be separated between commercial leasing companies and financial leasing companies, factoring in their fundamental differences. </li>
</ul>
<p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>


Leasing companies in China can be broadly classified into 2 categories: commercial leasing companies and financial leasing companies.
Financing leasing companies enjoy lower funding costs than that of commercial leasing companies given their more diversified funding channels and more stringent regulatory requirements.
Hence, the RV analysis should also be separated between commercial leasing companies and financial leasing companies, factoring in their fundamental differences. 

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Initiate Coverage on Chinese Leasing Sector

Equity Bottom-Up

<ul><li>FEH announced 1H23 results with total revenue up 3.6% YoY and net profit attributable to shareholders up by 8.0% YoY to RMB3.07bn, in line with our forecast.</li><li>The Group’s core financial business rose 5.4% YoY, driving ~60% of total revenue growth over years.</li><li>It was empowered by industrial contributions that primarily incl. 1) operating lease from Horizon CD (+18.0% YoY) and 2) hospital operations under Horizon Healthcare (+16.2% YoY). </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

FEH announced 1H23 results with total revenue up 3.6% YoY and net profit attributable to shareholders up by 8.0% YoY to RMB3.07bn, in line with our forecast.The Group’s core financial business rose 5.4% YoY, driving ~60% of total revenue growth over years.It was empowered by industrial contributions that primarily incl. 1) operating lease from Horizon CD (+18.0% YoY) and 2) hospital operations under Horizon Healthcare (+16.2% YoY). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Far East Horizon (3360 HK) – 1H23 In-Line: Solid Asset Quality

<ul><li>FEH continued to deliver double-digit profit growth in FY22, with net profits up 11% YoY, translating into 12% YoY growth in 2H21.</li><li>Pre-provision operating profit (PPoP) increased by 6% YoY in FY22, and was up 7% YoY in 2H22.</li><li>The decent earnings growth was primarily driven by 1) continual NIM expansion against macro headwinds (+53bps YoY to 4.67% in FY22, and +37bps HoH to 4.86% in 2H22) on the back of both lower funding costs and higher asset yields, and 2) robust revenue growth from industrial operations (+16% YoY). Asset quality remained stable in 2H22, with NPL ratio and 30+ days overdue ratio further trending down HoH. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

FEH continued to deliver double-digit profit growth in FY22, with net profits up 11% YoY, translating into 12% YoY growth in 2H21.Pre-provision operating profit (PPoP) increased by 6% YoY in FY22, and was up 7% YoY in 2H22.The decent earnings growth was primarily driven by 1) continual NIM expansion against macro headwinds (+53bps YoY to 4.67% in FY22, and +37bps HoH to 4.86% in 2H22) on the back of both lower funding costs and higher asset yields, and 2) robust revenue growth from industrial operations (+16% YoY). Asset quality remained stable in 2H22, with NPL ratio and 30+ days overdue ratio further trending down HoH. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Far East Horizon (3360 HK) – NIM expansion HoH in 2H22; sound asset quality

<div><div><div><div><ul><li>FEH reported stable and decent results of 3Q22 in spite of the macro headwinds. In 9M22, total revenue and net profit both grew around 10% YoY, largely in line with 1H22 growth (revenue +9.5% YoY, net profit +10.5% YoY).</li><li>In spite of the lowering loan yields, FEH managed to further expand its NIM on both QoQ and YoY basis, thanks to the improved funding structure and costs.</li><li>We expect the NIM expansion will sustain into 4Q22. On asset quality front, the non-performing assets (NPA) ratio was flattish at 1.06% at end-3Q22 (vs. 1.06% at end-1H22) and likely will remain stable into 4Q22, in our view. </li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

FEH reported stable and decent results of 3Q22 in spite of the macro headwinds. In 9M22, total revenue and net profit both grew around 10% YoY, largely in line with 1H22 growth (revenue +9.5% YoY, net profit +10.5% YoY).In spite of the lowering loan yields, FEH managed to further expand its NIM on both QoQ and YoY basis, thanks to the improved funding structure and costs.We expect the NIM expansion will sustain into 4Q22. On asset quality front, the non-performing assets (NPA) ratio was flattish at 1.06% at end-3Q22 (vs. 1.06% at end-1H22) and likely will remain stable into 4Q22, in our view. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Far East Horizon (3360 HK) – NIM expansion continued in 3Q

<ul><li>FEH delivered a set of decent results in 1H22 in spite of the headwinds from COVID restrictions.</li><li>Net profit grew 10% YoY to RMB2.84bn in 1H22, tracking 47% of our FY22E forecast.</li><li>The solid earnings growth was primarily driven by 1) continual NIM expansion (+53bps YoY, or +32bps HoH) on the back of lower funding costs, 2) robust growth of interest-earning assets (+10% HoH) and 3) strong revenue growth from industrial operations (+21% YoY). Asset quality remained stable in 1H22.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

FEH delivered a set of decent results in 1H22 in spite of the headwinds from COVID restrictions.Net profit grew 10% YoY to RMB2.84bn in 1H22, tracking 47% of our FY22E forecast.The solid earnings growth was primarily driven by 1) continual NIM expansion (+53bps YoY, or +32bps HoH) on the back of lower funding costs, 2) robust growth of interest-earning assets (+10% HoH) and 3) strong revenue growth from industrial operations (+21% YoY). Asset quality remained stable in 1H22.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Far East Horizon Limited (3360 HK) – Continual NIM expansion in 1H22

Hong Kong

Far East Horizon is a diversified conglomerate operating across finance and industrial sectors, with core businesses in financial leasing, supply chain finance, and asset investment management. The company also provides industrial services including equipment operation, healthcare, and education. Incorporated in Hong Kong in 2008, its headquarters are located in Hong Kong.

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Far East Horizon (3360 HK)

Initiate Coverage on Chinese Leasing Sector

Leasing companies in China can be broadly classified into 2 categories: commercial leasing companies and financial leasing companies.

CMB International