Understanding the Market | BOC AVIATION is currently down over 3% as weakened interest rate cut expectations put pressure on the liability side, while insufficient upstream capacity hampers aircraft deliveries

Zhitong
2025.01.15 06:58
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BOC AVIATION is currently down over 3%, as of the time of writing, down 2.96% to HKD 58.95, with a trading volume of HKD 21.4699 million. In terms of news, the non-farm payroll data for December shows that the U.S. job market remains strong, exceeding market expectations, which has weakened the market's expectations for a Federal Reserve interest rate cut. GF Securities previously pointed out that the company's performance in the first half of 2024 will still be significantly dragged down by liabilities, with financial expenses of USD 358 million during the period, an increase of 20.6% year-on-year, and the annual interest rate rising from 3.9% in the first half of 2023 to 4.6% in the first half of 2024. Huatai Securities noted that BOC AVIATION disclosed quarterly operational data. Insufficient production capacity from upstream aircraft manufacturers has affected aircraft deliveries, with 13 aircraft delivered in the fourth quarter of 2024, a decrease of 26 aircraft year-on-year, while the number of owned aircraft at the end of the quarter slightly increased by 5 to 435. The company is attempting to enter the engine business, with 10 engines owned by the end of the fourth quarter, which is expected to help fill the capital expenditure gap caused by insufficient aircraft production capacity. Additionally, the slowdown in Federal Reserve interest rate cuts may put pressure on the company's funding costs. It is expected that the core ROE for the entire year of 2024 will be roughly the same as that of 2023

According to the Zhitong Finance APP, BOC Aviation (02588) is currently down over 3%, and as of the time of writing, it has decreased by 2.96%, trading at HKD 58.95, with a transaction volume of HKD 21.4699 million.

In terms of news, the non-farm payroll data for December shows that the U.S. job market remains strong, exceeding market expectations, which has weakened the market's expectations for a Federal Reserve interest rate cut. GF Securities previously pointed out that the company's performance in the first half of 2024 will still be significantly affected by liabilities, with financial expenses of USD 358 million during the period, an increase of 20.6% year-on-year, and the annual interest rate rising from 3.9% in the first half of 2023 to 4.6% in the first half of 2024.

Huatai Securities noted that BOC Aviation disclosed its quarterly operational data. Insufficient production capacity from upstream aircraft manufacturers has hindered aircraft deliveries, with 13 aircraft expected to be delivered in the fourth quarter of 2024, a decrease of 26 aircraft year-on-year. At the end of the quarter, the company's owned aircraft increased slightly by 5 to 435. The company is attempting to enter the engine business, with 10 engines owned by the end of the fourth quarter, which is expected to help fill the capital expenditure gap caused by insufficient aircraft production capacity. Additionally, the slowdown in Federal Reserve interest rate cuts may put pressure on the company's funding costs. It is expected that the core ROE for the entire year of 2024 will be roughly in line with that of 2023

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