BOC Aviation: Strong Financial Performance and Strategic Position Reinforce Buy Rating with Significant Upside Potential

DBS analyst Jason Sum maintained a Buy rating on BOC Aviation (BCVVF – Research Report) today and set a price target of HK$84.00.

Jason Sum has given his Buy rating due to a combination of factors that highlight BOC Aviation’s strong financial and strategic position. The company has demonstrated a robust financial performance, exceeding profit expectations for FY24 by 5%, and has declared a record dividend, supported by favorable one-off events like insurance settlements and asset write-backs. Despite a slight reduction in FY25 profit forecasts, the medium-term growth outlook remains positive, driven by competitive funding costs and a solid portfolio quality.
BOC Aviation’s strategic advantages include its lower cost of funding compared to industry peers, a young and high-quality fleet, and a strong global presence. The company is expected to achieve a 17% compound annual growth rate in core earnings from FY24 to FY26, supported by increased aircraft deliveries, lease repricing, and attractive sales margins. Additionally, its low gearing provides flexibility for growth through debt-funded acquisitions. The current aircraft shortage further positions BOC Aviation to benefit from rising lease rates and demand, reinforcing the Buy recommendation with a target price of HKD84, suggesting a significant upside potential.

Sum covers the Industrials sector, focusing on stocks such as ST Engineering, GE Aerospace, and Boeing. According to TipRanks, Sum has an average return of 5.7% and a 56.82% success rate on recommended stocks.