Dividends are growing steadily, and dividend rates are impressive. The company achieved total revenue of 37.7 billion yuan in 2024, which is basically the same as the previous year; in 2024, net profit attributable to common shareholders was 3.9 billion yuan, a decrease of 38% over the previous year. The average ROE in 2024 was 7.8%, down 5.2 percentage points year over year. The 2024 cash dividend of HK$0.55 per share continued to grow steadily. The cash dividend ratio reached 56%. The static dividend rate corresponding to the 2024 dividend was close to 9%. It is expected that the dividend per share index will continue to grow.
The overall asset scale is stable, and HORIZON CD is expanding rapidly. The company's total assets increased 3% year on year to 360.4 billion yuan at the end of 2024, and the scale remained stable. Among them, loans and receivables fell 4% year on year to 260.6 billion yuan.
In 2024, the national financial leasing contract balance fell 3% year on year. The entire industry is in a contraction stage, and Yuandong Hongxin's performance is close to the overall level of the industry. The subsidiary HORIZON CD expanded rapidly. Total assets increased 17% year over year in 2024, mainly due to the expansion of business scale, especially the accelerated layout of overseas business.
The return on interest-bearing assets and the cost of debt have both declined, and net interest spreads have decreased slightly. The company's return on interest-bearing assets in 2024 was 8.06%, a year-on-year decrease of 18 bps, mainly affected by declining market interest rates and rising customer tiers. The 2024 interest-bearing debt cost ratio was 4.06%, a year-on-year decrease of 20 bps, mainly affected by factors such as maturing repricing of high-cost liabilities. Net interest spread in 2024 was 4.48%, down 10bps year over year.
The industrial operations sector grew relatively fast, and gross margin declined slightly. The company's revenue from the industrial operation segment increased 10% year on year to 16.2 billion yuan in 2024. Among them, HORIZON CD's revenue increased 20% year over year to 11.6 billion yuan, while revenue from other sectors declined slightly. In 2024, the gross profit margin of the industrial operation sector was 30%, a slight decrease of 2 percentage points from the previous year. Mainly affected by factors such as macroeconomics and increased investment in overseas business, HORIZON CD's gross margin declined.
The cost rate was stable during the period. The company's total sales and administrative expenses, other expenses, and financial costs accounted for about 25% of the company's operating income in 2024, and remained stable.
The overall quality of assets is stable. The company's defect rate at the end of 2024 was 1.07%, up 0.03 percentage points from the beginning of the year; the attention rate was 5.58%, down 0.39 percentage points from the beginning of the year. In 2024, the bad generation rate was 0.41%, down 0.12 percentage points from the previous year. The provision coverage rate at the end of 2024 was 228%, the same as at the beginning of the year. The provision plan was strengthened, and the credit cost ratio increased by 0.40 percentage points to 0.47% over the same period last year.
Investment suggestions: Taking into account factors such as the contraction of the overall scale of the industry and declining market interest rates, we expect the net profit of ordinary shareholders to be 4.2/4.4/4.6 billion yuan in 2025-2027 (the previous forecast value for 2025-2026 was 6.5/6.7 billion yuan), with a year-on-year growth rate of 10%/4%/4%; diluted EPS is 0.98/1.02/1.06; the PE corresponding to the current stock price is 5.8/5.6/5.4x, PB is 0.49/0.47/0.45x . The quality of the company's assets is stable, and the dynamic dividend rate is about 10%. We maintain a “superior to the market” rating.
Risk warning: The weakening macroeconomic situation may adversely affect the quality of the company's assets.
