1H17 results miss expectations
　　1H17 revenue was HK$1.26bn, up 23% YoY; net profit wasHK$249mn, up 4% YoY to HK$0.37 per share. A DPS of HK$0.18was declared for the interim, equivalent to 49% payout.
　　Trends to watch
　　Nine new aircraft delivered in 1H, with seven under operatinglease, expanding the fleet under operating lease to 25 （1H16:
　　10）， allowing an increase of 93% YoY in operating lease income.
　　The company completed rental realization for ten aircraft in1H17, which led to a smaller base of financial lease receivables（-10% HoH）。 As a result, financial lease income shrank 12% YoY.
　　Management guided up its fleet size to no less than 232 by2023e, with at least 110 by 2017-end. This implies new deliveryof 20 aircraft in 2H.
　　Markedly, CALC’s client base is steadily expanding: six of ninenew aircraft were placed to new overseas customers. By 1H17,its client base increased to 20 airlines （2016: 16） located in eightcountries and regions.
　　Stronger RMB expectation may affect buyers’ interest insecuritized lease receivable products, which may slow rentalrealization. Nonetheless, its young fleet, strong order book andproven placement capability should yield long-term growth.
　　Earnings forecast
　　We raise 2017e earnings by 10% to HK$697mn andintroduce 2018e at HK$814mn. The revision is based onfaster fleet expansion as guided by management.
　　Valuation and recommendation
　　The stock is trading at 1.8x 2017e P/B. We maintain a BUY rating on the stock, with unchanged TP of HK$10.58.
　　Risks
　　New aircraft deliveries; competition from bank-affiliated lessors.