HK Stock Market Move | BOC AVIATION (02588) is now down over 3%, with reduced expectations of interest rate cuts putting pressure on the liabilities side. Insufficient upstream capacity is dragging down aircraft deliveries.

BOC AVIATION (02588) is currently down more than 3%, with a decrease of 2.96% at the time of writing, trading at 58.95 Hong Kong dollars with a turnover of 2146.99 million Hong Kong dollars. On the news front, the December non-farm payroll data shows that the U.S. job market remains strong, exceeding market expectations, weakening market expectations for a Fed rate cut. GF SEC previously pointed out that the company's performance in the first half of 2024 is still significantly affected by the debt side, with financial expenses amounting to 3.58 billion U.S. dollars, an increase of 20.6% year-on-year, and the annual interest rate rising from 3.9% in the first half of 2023 to 4.6% in the first half of 2024. Huatai stated that BOC AVIATION disclosed quarterly operating data. Insufficient capacity from upstream aircraft manufacturers has affected aircraft deliveries, with 13 aircraft delivered in the fourth quarter of 2024, a decrease of 26 aircraft compared to the same period last year. At the end of the quarter, the company's own aircraft fleet increased by a slight 5 aircraft to 435. The company is trying to enter into the engine business, with 10 own engines at the end of the fourth quarter, potentially offsetting the capital expenditure gap caused by insufficient aircraft capacity. Furthermore, the slowdown in Fed rate cuts could put pressure on the company's cost of funds. It is expected that the core ROE for the full year of 2024 will be roughly the same as in 2023.