远东地平线(3360.HK)要点：FY26E股息稳定并有上涨空间，股息收益率超10%

Takeaways: FY26E DPS Stable with Upside, Translating into >10% DivYield CITI’S TAKEWe hosted Far East Horizon (“FEH”) at Citi 2026 Financial and Property Buy Conference, and we provide our key takeaways as below. 1H26E earnings likely to see modest growth; Full-year DPS at least stable withpotential upside –Mgmt expected to deliver modest earnings growth in 1H26E, withfull-year DPS at lease stable with some potential upsides. Overall, the operating trendyear to date has been similar to that in 1Q26 and FY25. Mgmt attributed the recentshare price weakness mainly to fund flow movement rather than any change infundamentals. Mgmt believed the current share price has been severely undervaluedsince the dividend yield would exceed 10%. Michelle Ma, CFAAC+852-2501-2723michelle.ma@citi.com Finance lease business resilient with inclusive business on track –Mgmt expectedfinance lease business to likely deliver modest increase in revenue and net profit in1H26E, driven by slight expansion of interest-earning asset scale and modest NIMexpansion. Mgmt noted that there were some decelerations in loan growth in public-oriented sectors such as healthcare and constructions, while private sectors andinclusive finance business have been tracking decent growth momentum. Mgmtshared that its inclusive finance lease business would reach a scale of over Rmb30bnof interest-earning assets by the end of 1H26 and aim for Rmb40bn by YE26E. NIM isexpected to see modest expansion yoy in 1H26E, as FEH strived to enhance customerstickiness in its traditional finance lease business and expand its inclusive business.Mgmt noted that asset quality would remain stable in 1H26E. Amy Jy Chenamy.jy.chen@citi.com Equipment operations and hospital operations remain stable –Mgmt expectedequipment operations to remain stable in 1H26E, as overseas business growth couldbroadly offset the pressure from intense market competition onshore. As to hospitaloperations, mgmt anticipated to see continued pressure from external environment. Far East Horizon Valuation We derive our target price of HK$8.6 for Far East Horizon by using a three-stage model to impute a fair P/B. Key modelassumptions include a discount rate of 9.8%, first-stage growth of 3.3%, second-stage growth of 4.0%, and terminal growth of4.0%. Using the implied 2026E fair Price/Book multiple of 0.68x results in a target price of HK$8.6. Risks Key downside risks that could impede Far East Horizon’s share price from achieving our target price include a macro hard-landing in China, steep deterioration in asset quality and credit cost, insufficient room for leveraging up, regulatory tighteningon industry operations and changes in monetary policies. If you are visually impaired and would like to speak to a Citi representative regarding the detailsof the graphics in this document, please call USA 1-888-500-5008 (TTY: 711), from outside theUS +1-210-677-3788 Appendix A-1 ANALYST CERTIFICATION The research analysts primarily responsible for the preparation and content of this research report are either (i) designatedby “AC” in the author block or (ii) listed in bold alongside content which is attributable to that analyst. If multiple ACanalysts are designated in the author block, each analyst is certifying with respect to the entire research report other than(a) content attributable to another AC certifying analyst listed in bold alongside the content and (b) views expressed solelywith respect to a specific issuer which are attributable to another AC certifying analyst identified in the price charts orrating history tables for that issuer shown below. Each of these analysts certify, with respect to the sections of the reportfor which they are responsible: (1) that the views expressed therein accurately reflect their personal views about eachissuer and security referenced and were prepared in an independent manner, including with respect to Citigroup GlobalMarkets Inc. and its affiliates; and (2) no part of the research analyst's compensation was, is, or will be, directly orindirectly, related to the specific recommendations or views expressed by that research analyst in this report. IMPORTANT DISCLOSURES Citigroup Global Markets Inc. or its affiliates received compensation for products and services other than investment bankingservices from Far East Horizon in the past 12 months. Citigroup Global Markets Inc. or its affiliates currently has, or had within the past 12 months, the following as clients, and theservices provided were non-investment-banking, non-securities-related: Far East Horizon. Analysts’ compensation is determined by Citi Research management and Citigroup’s senior management and is based uponactivities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates (the “Firm”).Compensation is not linked to specific transactions or recommendations. Like all Firm employees, analysts receivecompensation that is impacted by overal