Investment Rating - The report assigns a "Buy" rating for the company [14]. Core Insights - Horizon CD's core net profit for the first half of 2024 decreased by 16% year-on-year to RMB 268 million, which aligns with expectations. The company proposed an interim dividend of HKD 0.04 per share, marking its first since listing [1]. - The company is returning to a capital expenditure growth model to achieve product diversification and overseas expansion, with capital expenditures increasing 3.6 times year-on-year to RMB 4.4 billion in the first half of 2024 [1]. - Revenue for the first half of 2024 grew by 16% year-on-year to RMB 4.9 billion, while gross margin contracted by 2.1 percentage points to 32% [1][4]. - The target price has been slightly adjusted from HKD 3.70 to HKD 3.60, based on a 10x 2024E P/E ratio, indicating limited downside risk [1][3]. Summary by Sections Financial Performance - Revenue for FY22 was RMB 7.878 billion, with a year-on-year growth of 28.3%. For FY23, revenue is projected at RMB 9.611 billion, reflecting a growth of 22.0% [2]. - Adjusted net profit for FY22 was RMB 944.8 million, with a year-on-year growth of 28.2%. The forecast for FY24 is RMB 1.186 billion, indicating a growth of 13.7% [2]. - The company reported a net debt-to-equity ratio of 164% as of June 2024, up from 147% at the end of 2023 [1]. Segment Performance - The operating leasing segment, which accounts for 39% of revenue, saw a 24% decline year-on-year to RMB 1.896 billion, primarily due to rental rates and overall utilization [3]. - Engineering and technical services, making up 40% of revenue, experienced a 71% increase year-on-year to RMB 1.946 billion, with gross margin improving by 6.3 percentage points to 27% [3]. - Asset management and other services, contributing 21% of revenue, grew by 84% year-on-year to RMB 1.031 billion, with asset management service revenue increasing 150% to RMB 744 million [3]. Valuation Metrics - The company’s P/E ratio for FY24 is projected at 3.7x, with a P/B ratio of 0.4x. The dividend yield is expected to be 8.2% in FY24 [2][13]. - The net asset return rate is forecasted to be 10.4% for FY24, with a net debt-to-equity ratio of 151.4% [2][6]. Cash Flow and Capital Expenditure - Operating cash flow for the first half of 2024 increased by 4% year-on-year to RMB 13.5 billion, while investment cash outflow was RMB 3.1 billion [1]. - Capital expenditures are expected to remain significant as the company focuses on expanding its equipment portfolio and overseas presence [1][12].
宏信建发：回归资本支出增长模式 ， 实现产品多元化和海外扩张