Jinwu Financial News | Ping An Securities released a report, stating that FE HORIZON (03360) announced its 2024 full-year performance, with revenue of 37.749 billion yuan (YoY -0.6%) and net income attributable to shareholders of 3.862 billion yuan (YoY -37.6%). Total assets are 360.4 billion yuan (YoY +2.5%), with net assets attributable to shareholders at 49 billion yuan (YoY -2.2%). EPS (diluted) is 0.89 yuan, and BVPS is 11.34 yuan.
The report indicates that the company's financial division has a gross profit of 12.3 billion yuan (YoY -8%), mainly due to a decline in interest income. For the year, the company made provision for reserves of 1.25 billion yuan (vs last year's 0.19 billion yuan), partly due to a year-on-year increase of 0.23 billion yuan in provisions for interest-earning assets, with more prudent provisioning and write-off policies for the inclusive finance business leading to a provision increase of 0.17 billion yuan; on the other hand, last year's lower provisions were due to the elimination of one-time factors like the disposal of certain Hospital and Ship assets impairment provisions. The consolidated income tax rate is 43.7% (YoY +10 pct), mainly due to cross-border dividend funding transfers to overseas companies.
The report continues to state that the company plans to distribute a cash dividend of 0.30 HKD per share, with an annual total dividend of 0.55 HKD per share (including interim dividends) (YoY +10%), corresponding to a dividend payout ratio of about 56% (according to the company’s official promotional material), an increase of about 25 pct from 31% in 2023. If the physical dividend distribution of HORIZON CD shares for 2024 is included, the annual dividend payout ratio would be about 88% (according to the company’s official promotional material, physical distribution is calculated based on the closing stock price of HORIZON CD on the trading day prior to the ex-dividend date).
The report states that considering the complex internal and external economic environment, the company's Operation is relatively cautious, and due to changes in reserve policies and the rising income tax rate affecting 2024, net income is expected to decline significantly. Therefore, the forecast for net income attributable to shareholders for 2025-2026 has been adjusted to 4.2/4.4 billion yuan (original forecast was 6.1/6.6 billion yuan), with a new forecast for 2027 of 4.7 billion yuan, corresponding to year-on-year growth rates of 8.8%/5.1%/6.2%. However, considering FE HORIZON's leading position in leasing, equipment operation, and other businesses remains significant, the company's Operation is stable, and shareholder returns are excellent, maintaining a high dividend rate. The current dividend yield (TTM, March 7, 2025, according to Wind) exceeds 12%, still leading in the Hong Kong stock financial Sector. The current company stock price corresponds to a 2025 PB ratio of about 0.5 times, maintaining a 'Recommended' rating.
