Chailease Holding Co Ltd (中租控股), the nation’s top leasing services provider, yesterday gave an upbeat outlook on earnings for the rest of this year, citing growth recovery in China and increased contributions from ASEAN markets.
The company reported that net income last quarter rose 33 percent annually to NT$2.16 billion (US$71.37 million), or earnings per share of NT$1.89.
Returns on assets and returns on equity also improved to 3.1 percent and 22 percent respectively, up from 2.5 percent and 19 percent a year earlier, the company said.
Net profit contribution from China last quarter rose 70 percent annually and 76 percent quarterly to NT$818 million, as the company reduced general provisions with more stringent loan approvals, it said, adding that delinquency eased to 4.7 percent from 4.9 percent in the previous quarter.
During the period, delinquent loan allowances dipped from NT$3.51 billion to NT$3.44 billion, which pushed the allowance-to-loan portfolio ratio from 4.8 percent to 4.9 percent as new loans growth accelerated, Chailease said.
There would be limited effects amid concerns about increasing capital costs in China following a deleveraging campaign in that nation’s financial sector, it said.
The company, which saw funding costs last quarter rise from 4.23 percent to 4.33 percent, said that Chinese banks have been raising loan prices and seeking more profitable clients as a limit on loan book expansion came into effect.
However, the effects would be limited, as the company can still find comparable loan terms from a selection of 20 to 30 Chinese banks that it has been working with, it said.
Most of its funds are sourced from syndicated loans, which are less affected by deleveraging, it said.
At home, the company reported that net income rose 9 percent quarterly as well as annually to NT$1.35 billion.
However, the delinquency rate rose to 4 percent last quarter from 3.6 percent in the previous quarter, the company said, adding that the figure is manageable.
The increased delinquency was because of an across-the-board weakening and the decline is not attributable to any particular industry, it said.
Meanwhile, net income contribution from ASEAN last quarter rose 12 percent annually to NT$188 million, but dipped 8 percent on a quarterly basis, the company said.
During the period, Vietnam and Malaysia showed the fastest growth, while Thailand saw slower expansion, the company said.
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