Bohai Leasing (000415) Q4 2023 earnings summary

Executive summary

• Revenue rose 5.49% YoY to RMB33.67bn; net income attributable to shareholders was RMB1.28bn versus a RMB1.99bn loss in 2022. Adjusted for non-recurring items, net profit was RMB223m.

• Recovery in aviation lifted aircraft leasing income and collections, while container leasing profit declined as sales prices normalized. Liquidity and debt maturities remain significant constraints.

• The auditor issued an unqualified opinion; management assessed that available financing and restructuring measures support operations for 12 months after year-end.

Financial highlights

• Revenue was RMB33.675bn, up 5.49% YoY; net income was RMB1.819bn and net income attributable to shareholders was RMB1.281bn, versus losses of RMB2.370bn and RMB1.987bn in 2022.

• Adjusted net profit attributable to shareholders, excluding non-recurring items, was RMB223m versus a RMB2.995bn loss; basic and diluted EPS were RMB0.2072 versus negative RMB0.3219.

• Operating profit was RMB2.729bn versus a RMB2.058bn loss; total asset impairment was RMB1.751bn, including RMB1.668bn of aircraft impairment.

• Operating cash flow rose 21.84% to RMB25.601bn; investing cash outflow was RMB6.267bn and financing cash outflow was RMB19.478bn. Cash and cash equivalents declined RMB26.8m.

Outlook and guidance

• 2024 priorities include focusing on leasing, improving utilization and asset returns, maintaining liquidity, lowering financing costs, and optimizing the debt structure.

• Aircraft leasing plans emphasize global recovery, fleet renewal demand, asset quality and returns, while preserving liquidity and investment-grade ratings.

• Container plans focus on renewals, stable long-term lease rates, improving dry and refrigerated container returns, and managing fleet inventory against market conditions.

• Domestic leasing investment is expected to resume gradually as liquidity eases and market credit recovers; debt extensions, refinancing, asset disposals and potential equity financing are planned liquidity tools.