Mon, May 14, 2018 - Page 15 News List

Chailease has record success, keeps goal

QUALITY LOANS:Even though the number of loans increased, the delinquency rate fell to 3.3% in Taiwan and 2.9% in China, and bad debt expenses fell 33.3% annually

By Crystal Hsu  /  Staff reporter

Chailese Holding Co (中租控股), the nation’s top leasing services provider, is standing by its loan growth target for this year, after first-quarter revenue and profit hit record highs for the period.

The company posted NT$3.03 billion (US$101.8 million) in net income during the January-to-March period, up 40.7 percent from a year earlier, as loan demand proved strong despite a low season, the company told an investors’ conference on Wednesday last week.

The results translated into earnings per share of NT$2.40, compared with NT$1.71 in the same period last year.

Consolidated revenue for last quarter grew 23 percent annually to NT$11.5 billion, as Taiwan, China and ASEAN markets saw revenues grow by 9 percent, 38 percent and 25 percent respectively from a year ago.

“We will stand by our growth forecast for this year, because we need to make sure that the growth momentum can be sustained,” said a company official, who declined to be named.

The Taipei-based company has set its overall loan growth target at 10 percent for this year, whereas loan growth in China and ASEAN markets might see a pickup of 15 to 20 percent from last year.

“Let’s wait until the end of this quarter to see if adjustments are necessary,” the official said.

In the first quarter, the company registered loan growth of 11.4 percent in Taiwan, 32.4 percent in China and 21.7 percent in the ASEAN region.

Chailease said an increase in total loans allowed its receivable and fee income balance to improve.

In particular, loan demand by small and medium-sized enterprises in China grew faster than expected, bucking traditional seasonality, the company said.

Despite the increase in loans last quarter, the company saw asset quality improvement in all regions, as the delinquincy rate dropped to 3.3 percent in Taiwan and 2.9 percent in China, while bad debt provision expenses fell 33.3 percent year-on-year to NT$810 million.

Chailease shares closed at NT$112 on Friday last week in Taipei trading, up 2.83 percent for the week and 25.87 percent this year.

Considering the company’s better-than-expected first-quarter results during the low season and recovering capital demand amid an improving economy, coupled with its persistent improvement of asset quality and a decrease in bad debt provision, Capital Investment Management Corp (群益投顧) forecast that Chailease’s earnings per share could grow further this year from last year’s NT$7.64.

In an investment note on Thursday last week, Capital Investment maintained its 12-month target price for Chailease’s shares at NT$125, valuing the stock at 13.75 times its estimated earnings per share of NT$9.09 this year.

“We see further upside to the valuation of Chailease,” Capital Investment analyst Sean Yang (楊軒一) said in the note.

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