On August 31, 2023, China Development Bank Financial Leasing Co, Ltd. (1606.HK, hereinafter referred to as CDB Leasing) released its interim results for 2023. Despite the complex and volatile global economic situations in 1H23, CBD Leasing proceeded steadily, presented enormous business growth resilience and maintained stable results bucking the increasingly severe and complex external pressure. In 1H23, the Company put a combined RMB54.57 billion into circulation and maintained high international credit ratings, including Moody’s A1, Standard & Poor’s A and Fitch’s A+.
Financial indicators remained broadly robust
(1) Total assets amounted to RMB363.986 billion, up 2.6% from the end of last year;
(2) It reported a revenue of RMB11.847 billion, and a net profit of RMB1.96 billion, edging up 0.5% yoy;
(3) The ROA averaged 1.09%, up 0.13 percentage points yoy; ROE 11.22%, up 0.81 percentage points yoy;
(4) The non-performing asset ratio, which stood at 0.78%, has consistently remained under 1% since the Company’s listing, attributable to its stable asset quality;
(5) The ratio of allowance to non-performing financial lease related assets remained high and stood at 491.85%.
Optimizing business mix
The Aircraft Leasing division reported total assets of RMB98.03 billion and generated RMB3.979 billion in revenues and other proceeds in 1H23. To enhance its expertise in aircraft leasing and continue to optimize the fleet structure, the Company entered into new contracts with 9 clients on the leasing of 21 aircraft, added a lessee, completed the sales of five used planes, and beefed up its efforts to collect overdue rentals and prevent and defuse risks.
The Ship Leasing division reported total assets of RMB53.955 billion and generated RMB2.69 billion in revenues and other proceeds in 1H23. The Company managed to strike a balance between operating leasing and financial leasing to improve business stability. In 1H23, the Company, boasting a total of 262 ships of which 228 are in running conditions and 34 new ones are under construction, continued to optimize structurally the fleet for operating leasing, reinforced ship management services and worked hard to consolidate its world-class position in operating leasing ship management. Ships self-run by the Company enjoyed sound operational conditions, with an operating rate of more than 99%.
The Regional Development Leasing division reported total assets of RMB131.698 billion and generated RMB3.222 billion in revenues and other proceeds. The Company focused on significant regional development strategies including coordinated development of the Beijing-Tianjin-Hebei region, the Yangtze River Economic Belt and the Guangdong-Hong Kong-Macao Greater Bay Area, and was increasingly slanted towards the strategies in terms of resource allocation and capital spending. The above three regions occupied close to 66% of the total capital spending in the division in 1H23.
The Inclusive Finance division reported total assets of RMB32.695 billion and generated RMB944 million in revenues and other proceeds in 1H23. On the back of cementing its market share in engineering machinery, the Company continued to pursue innovation in vehicle business and experienced swift growth in its passenger vehicles-related business, thus benefiting an increasing number of micro, small and medium-sized clients. In 1H23, the Company deployed more than 60,000 vehicles, serving directly or indirectly over 40,000 end users; and more than 6,000 units of engineering machinery, serving directly or directly over 400 end users.
The Green Energy and High-end Equipment Leasing division reported total assets of RMB45.588 billion and generated RMB1.013 billion in revenues and other proceeds. The Company stretched its strengths of industry-finance integration in the leasing sector, propped up carbon peak and carbon neutrality initiatives and advanced manufacturing as well, tapped into green energy business, and showed ramped-up efforts and investment in fields such as integrated circuits, sci-tech innovation, clean energy power plants, etc. By the end of June 2023, the Company saw a total of 5.91GW installed capacity in its new energy power plants and injected an additional more than RMB3 billion into integrated circuit industry chain, automobile manufacturing, battery manufacturing and tunnel boring machine, among other areas.
Constant progress in internal management
In regard to capital management, CBD Leasing continued to reinforce capital management by holding additional shares worth RMB900 million in its subsidiary CBD Aviation. As of the end of June 2023, the Group’s capital adequacy ratio hit 12.33% and core tier-1 capital adequacy ratio stood at 9.75%. Sound capital management has helped ensure steady progress in business and shore up the Group’s sustainable operating capacity.
In regard to asset-liability management, the Company continued to optimize the asset-liability management system, strengthened asset-liability coordination efforts, reinforced liquidity management, established business ties with 175 banks which granted the Company with a credit line of more than RMB700 billion.
In regard to risk management, the Company pushed ahead with risk prevention and control in a down-to-earth manner, continued to improve comprehensively the risk management system, formulated the annual asset quality control plan, and improved the Group’s consolidation management systems and mechanisms to guard against any potential risks.
In regard to internal compliance management, the Company continued to improve its management systems, operating rules and business operating procedures and strengthened supervision and inspection to enhance work efficiency. The effective linkage between systems, mechanisms and measures has enabled the Company to foster a culture of compliance management for all employees and matters in all aspects, and to deepen the awareness that compliance is implemented to the benefit of development.
Outlook
Looking into the second half of 2023, the Company will continue to follow the general principle of pursuing progress while ensuring stability, uphold leasing as its core, persist in transition and innovation efforts, seek a better business landscape and reinforce internal compliance and risk management to improve operational and management efficiency, help deliver sustainable and high-quality development and create long-term value for its shareholders and clients, and the society at large.
