CICC maintains a outperform rating for CALC (01848) with a target price of 5.0 Hong Kong dollars.

CICC released a research report stating that it maintains its earnings forecast for CALC (01848) in 2026 and introduces a profit of HK$540 million for 2027, with the current trading at 0.6x/0.6x 26e/27e P/B. The company's outperformance rating and target price of HK$5.0 remained unchanged, corresponding to 0.8x/0.8x 26e/27e P/B and a 29% upside potential. CICC's main points are as follows: Company's performance in 2025 is lower than the bank's expectations In 2025, the company's revenue is down 3.6% year-on-year to HKD 5.02 billion, with a net profit of HKD 339 million, slightly lower than the bank's expectations, mainly due to exchange losses. In addition, the company's full-year dividend per share is HK$0.3, the same as in 2024, with a dividend yield of 7.8%, making it attractive to shareholders. Asset disposals accelerate, putting pressure on the main operating lease income On the revenue side, in 2025, the company's leasing income decreased by 12.9% to HKD 3.79 billion, with finance lease income increasing by 4% to HKD 640 million, and operating lease income decreasing by 16% to HKD 3.15 billion, mainly due to a decrease in the fleet size. As of the end of 2025, the company's owned fleet size was 149 planes (10 fewer than at the end of 2024). In terms of aircraft sales, the company's net income from aircraft and parts transactions increased by 182.6% to HKD 600 million in 2025, with 36 planes and 5 engines sold to third parties, with an average net income of HKD 13.7 million per aircraft. On the cost side, in 2025, the company's comprehensive financing cost decreased by 51 bps to 5.03%, mainly due to active debt restructuring, with the proportion of RMB debt to interest-bearing debt increasing by 5 ppt to 33% by the end of 2025. A high-quality fleet strengthens the performance base, and the aftermarket business may enter a period of rapid growth In terms of fleet situation, as of the end of 2025, the company had a fleet of 176 planes, with 149 owned and 27 managed planes. The average age of the owned fleet was 8.7 years, with an average remaining lease term of 7.3 years. Approximately 90% of the company's owned fleet consists of narrow-body aircraft, which is higher than industry average, with a 100% lease rate, leading the industry. In terms of orders, the company delivered 26 planes in 2025 and ordered 30 A320neo series planes during the year, with a backlog of 130 planes by the end of 2025. According to the company's performance meeting information, it is expected to deliver 25 planes in 2026. With the gradual improvement in supply and delivery, the company's high-quality order book is expected to support future growth. In addition, the company is gradually expanding its presence in the aviation aftermarket, with a total of 44 engines sold in 2025, which the bank believes could provide new growth support for the company. Risk warning: Geopolitical risks; demand recovery below expectations; aircraft delivery delays.