Core Viewpoint - The company reported a strong performance in 1H25, with revenues and profits exceeding expectations, driven by higher sales prices and increased alumina production [1] Financial Performance - 1H25 revenue was approximately $597 million, a year-on-year increase of 41.0% [1] - Shareholder profit for 1H25 was about $248 million, reflecting a year-on-year growth of 124.2% [1] - Alumina sales volume reached 1.127 million tons, up 3.0% year-on-year, with an average selling price of $529 per ton, a 36.9% increase [1] - The gross profit margin improved to 50.9%, up 8.7 percentage points year-on-year, with gross profit increasing by 70.1% [1] Tax and Dividend Policy - The company will adhere to the OECD's global anti-base erosion rules starting January 1, 2025, leading to an increase in income tax to 15%, up approximately 6 percentage points from 2024 [1] - The company announced its first interim dividend post-listing, with a payout ratio of about 20% [1] Development Trends - The company is a leading alumina producer in Southeast Asia, with a total alumina production capacity of 3 million tons per year as of August 2025 [2] - The second phase of alumina production, with an additional capacity of 1 million tons, is progressing faster than expected and is projected to commence in Q4 2025 or Q1 2026 [2] - The company benefits from cost advantages due to abundant bauxite and coal resources in Indonesia, as well as logistical efficiencies from a deep-water port expansion [2] Competitive Advantages - The company enjoys tax incentives for 20 years in the Karangbata Economic Zone, enhancing its regional market reach [2] - Major shareholders possess strong industry advantages across the alumina production and bauxite supply chain, facilitating synergy and collaboration [2] Profit Forecast and Valuation - The net profit estimates for 2025 and 2026 have been raised by 7% and 9% to $374 million and $500 million, respectively [2] - The current A-share price corresponds to a P/E ratio of 9x for 2025 and 6x for 2026, with a target price adjustment of 58% to HKD 52.59, indicating a 25% upside potential [2]

Market Overview - The non-ferrous metal sector has seen a strong rebound, with the Shenwan Non-Ferrous Metal Index rising by 8.59% over the past two weeks, ranking fifth among 31 primary industries [7] - The market has shown significant structural differentiation, with small metals, precious metals, and new materials performing particularly well, while rare earths, copper, and aluminum have attracted substantial capital [1][2] Precious Metals - Gold and silver prices have strengthened, with COMEX gold closing at $3,516 per ounce, reflecting a year-to-date increase of 31.63%, while silver has risen by 35.88% [1][17] - The demand for gold from global central banks continues to rise, enhancing its financial attributes, leading to increased investment in companies like Shandong Gold, Zhongjin Gold, and Hunan Gold [1][17] Industrial Metals - Copper prices have shown a strong upward trend, with LME copper settling at $9,805 per ton, up 12.89% year-to-date, driven by expectations of increased infrastructure investment and demand from the renewable energy sector [2][23] - Aluminum prices are constrained by production capacity limits, with domestic electrolytic aluminum capacity reaching 44 million tons, while demand from the new energy sector remains robust [2][27] Rare Earths - The rare earth sector has experienced a strong performance, with the rare earth price index rising by 6.39% over the past two weeks and 37.44% year-to-date [2][41] - Recent policy changes have tightened supply controls, benefiting companies like China Rare Earth, Northern Rare Earth, and Shenghe Resources [2][41][55] Small Metals - The small metals sector has seen significant price increases, with black tungsten concentrate prices rising by 24.26% over the past two weeks and 75.52% year-to-date [3][30] - Tin prices have also increased due to raw material shortages and recovering semiconductor demand, benefiting companies like Tin Industry Co., Huaxi Nonferrous Metals, and Xingye Silver Tin [3][31] Energy Metals - The energy metals sector has shown mixed performance, with electrolytic cobalt prices rising by 1.33% over the past two weeks and 86.71% year-to-date, while lithium carbonate prices have decreased by 3.69% in the short term but remain positive year-to-date [3][47][49] - Companies like Zijin Mining, Ganfeng Lithium, and Huayou Cobalt are positioned well across multiple supply chains, benefiting from low inventory and downstream replenishment demand [3][47] Fund Flow and Market Sentiment - The non-ferrous metal ETF has seen record trading volumes, with significant inflows into rare earth and copper sectors, indicating strong market sentiment and recognition of the sector's growth potential [3][56] - The market is shifting towards low-valuation, high-growth segments, with leading companies benefiting from favorable conditions [3][56]

Core Viewpoint - Nanshan Aluminum International reported a significant increase in revenue and profit for the first half of 2025, indicating strong financial performance and growth potential in the Southeast Asian market [1] Financial Performance - Revenue reached $597 million, a year-on-year increase of 41% [1] - Shareholder profit amounted to $248 million, reflecting a substantial year-on-year increase of 124.19% [1] - The company proposed an interim dividend of HKD 0.65 per share, with a payout ratio of approximately 20% [1] Market Position and Future Outlook - Following the second phase of capacity expansion, Nanshan Aluminum International is set to become the largest alumina producer in Southeast Asia, enhancing its market influence in the region [1] - The company’s net profit forecasts for the next two years have been raised by 7% and 9%, reaching $374 million and $500 million respectively [1] - The target price for the stock has been increased by 58% to HKD 52.59, maintaining an "outperform" rating [1]

Core Viewpoint - Nanshan Aluminum International reported strong mid-year results for 2025, with significant increases in revenue and profit, leading to a positive market response and an increase in target price by analysts [1] Financial Performance - Revenue reached $597 million, a year-on-year increase of 41% [1] - Shareholder profit amounted to $248 million, reflecting a year-on-year increase of 124.19% [1] - The company proposed an interim dividend of HK$0.65 per share, with a payout ratio of approximately 20% [1] Market Position and Future Outlook - The company is expected to become the largest alumina producer in Southeast Asia following the commissioning of its second-phase capacity [1] - Analysts have raised net profit forecasts for the next two years by 7% and 9%, projecting profits of $374 million and $500 million respectively [1] - The target price for the stock has been increased by 58% to HK$52.59, maintaining an "outperform" rating [1]

Core Viewpoint - Nanshan Aluminum reported significant double-digit growth in both revenue and profit for the first half of 2025, indicating strong operational performance and financial health [1]. Financial Performance - The company's revenue for the first half of 2025 reached 17.274 billion yuan, representing a year-on-year increase of 10.25% [2]. - The net profit attributable to shareholders was 2.625 billion yuan, up 19.95% year-on-year, while the net profit excluding non-recurring items was 2.611 billion yuan, reflecting a 21.04% increase [2]. - Basic earnings per share stood at 0.23 yuan [2]. Profitability Metrics - Nanshan Aluminum's gross margin for the first half of 2025 was 28.51%, an increase of 3.28 percentage points compared to the previous year [3]. - The net profit margin improved to 19.19%, up 2.42 percentage points year-on-year [3]. Cost Management - The company's operating expenses totaled 1.116 billion yuan, a decrease of 90.879 million yuan from the previous year, with an expense ratio of 6.46%, down 1.24 percentage points [3]. - Sales expenses decreased by 12.34%, management expenses fell by 4.67%, R&D expenses were down by 0.55%, and financial expenses saw a significant reduction of 88.39% [3]. Executive Compensation - The chairman and general manager, Lv Zhengfeng, received a salary of 1.418 million yuan in 2024, reflecting a 17.87% increase from the previous year's salary of 1.203 million yuan [5]. Historical Context - Nanshan Aluminum, established in 1993 and listed in 1999, specializes in the development, production, processing, and sales of aluminum and aluminum alloy products, as well as power generation [5].

Core Viewpoint - CICC has raised the net profit estimates for Nanshan Aluminum International (02610) for 2025 and 2026 by 7% and 9% to $374 million and $500 million respectively, due to increased production and sales along with rising prices [1] Group 1: Financial Performance - The company reported a revenue of approximately $597 million for 1H25, representing a year-on-year increase of 41.0% [1] - Shareholder profit for 1H25 was approximately $248 million, showing a significant year-on-year growth of 124.2% [1] - The 1H25 performance slightly exceeded CICC's expectations, driven by the increase in both volume and price of alumina [1] Group 2: Production and Pricing - In 1H25, alumina sales volume reached 1.127 million tons, up 3.0% year-on-year, while the average selling price was $529 per ton, reflecting a 36.9% increase year-on-year [1] - The operating cost per ton of alumina in 1H25 was $260, which is a 16.3% increase year-on-year, primarily due to the impact of the OECD's Pillar Two tax rules [1] Group 3: Future Outlook and Expansion - The company is a leading alumina producer in Southeast Asia, with a total alumina production capacity of 3 million tons per year as of August 2025, and a new project expected to add another 1 million tons of capacity by late 2025 or early 2026 [1] - CICC believes that the company's cost advantages, including access to abundant bauxite and coal resources in Indonesia, will support its expansion [1] - The company is also expanding its logistics capabilities by constructing a 70,000-ton deep-water port to enhance efficiency and reduce costs [1]

Core Viewpoint - CICC has raised the net profit forecast for Nanshan Aluminum International for 2025/2026 by 7%/9% to $374 million/$500 million due to increased production and sales, as well as rising prices [1] Group 1: Financial Performance - In 1H25, the company's revenue reached approximately $597 million, a year-on-year increase of 41.0%, while the profit attributable to shareholders was about $248 million, up 124.2% year-on-year [1] - The increase in performance was primarily driven by higher sales prices, which exceeded expectations [1] - The alumina sales volume in 1H25 was 1.127 million tons, a year-on-year increase of 3.0%, with an average selling price of $529 per ton, up 36.9% year-on-year [2] Group 2: Cost and Profitability - The operating cost for alumina in 1H25 was $260 per ton, a year-on-year increase of 16.3%, mainly due to rising raw material prices [2] - The gross profit margin improved to 50.9%, reflecting a year-on-year increase of 8.7 percentage points, with gross profit rising by 70.1% [2] Group 3: Tax and Dividend Policy - Starting January 1, 2025, the company will adhere to the OECD's global anti-base erosion rules, increasing its income tax rate to 15%, up approximately 6 percentage points from 2024 [3] - The company announced its first interim dividend post-listing, with a payout ratio of about 20% to reward shareholders [3] Group 4: Production Capacity and Market Position - As of August 2025, the company has established alumina production capacity of 3 million tons per year, with the second phase of a new project expected to be operational in Q4 2025 or Q1 2026 [4] - Upon completion of the second phase, the company will become the largest alumina producer in Southeast Asia, enhancing its market influence in the region [4] Group 5: Competitive Advantages - The company benefits from cost advantages due to abundant bauxite and coal resources in Indonesia, along with logistical efficiencies from expanding a deep-water port [5] - The project is located in the Karangbata Economic Zone, which offers a 20-year tax incentive, allowing the company to serve the entire Southeast Asian market [5] - The three major shareholders possess strong industry advantages across the alumina production and supply chain, facilitating synergy and complementary strengths [5]

Core Viewpoint - CICC has raised the net profit forecast for Nanshan Aluminum (600219) for 2025/2026 by 7%/9% to $374 million/$500 million due to increased production and sales as well as rising prices [1] Group 1: Financial Performance - In 1H25, the company's revenue reached approximately $597 million, a year-on-year increase of 41.0%, while the profit attributable to shareholders was about $248 million, up 124.2% year-on-year [1] - The increase in performance was primarily driven by higher sales prices [1] - The alumina sales volume in 1H25 was 1.127 million tons, a year-on-year increase of 3.0%, with an average selling price of $529 per ton, up 36.9% year-on-year [2] - The operating cost per ton of alumina was $260, a year-on-year increase of 16.3%, mainly due to rising raw material prices [2] - The gross profit margin reached 50.9%, an increase of 8.7 percentage points year-on-year, with gross profit rising by 70.1% [2] Group 2: Tax and Dividend Policy - Starting January 1, 2025, the company will comply with the OECD's global anti-base erosion rules, increasing its income tax rate to 15%, up approximately 6 percentage points from 2024 [3] - The company announced its first interim dividend post-listing, with a payout ratio of about 20% to reward shareholders [3] Group 3: Production Capacity and Market Position - As of August 2025, the company has established alumina production capacity of 3 million tons per year, with the second phase of a new project expected to be operational in Q4 2025 or Q1 2026 [4] - The company is set to become the largest alumina producer in Southeast Asia following the second phase capacity launch, enhancing its market influence in the region [4] Group 4: Competitive Advantages - The company benefits from cost advantages due to abundant bauxite and coal resources in Indonesia, along with logistical efficiencies from expanding a deep-water port [5] - The project is located in the Karangbata Economic Zone, which offers a 20-year tax incentive, allowing alumina products to serve the entire Southeast Asian region [5] - The three major shareholders possess strong industry advantages across the alumina production and supply chain, facilitating synergy and complementary strengths [5]

Investment Rating - The investment rating for Nanshan Aluminum is "Buy" (maintained) [1] Core Views - The company is experiencing significant expansion in Indonesia, showcasing strong growth potential. In H1 2025, the company achieved revenue of 17.274 billion yuan, a year-on-year increase of 10.25%, and a net profit attributable to shareholders of 2.625 billion yuan, up 19.95% year-on-year. However, Q2 2025 saw a decline in revenue and net profit due to a substantial drop in alumina prices [4][5] - The company plans to continue its mid-term profit distribution scheme, proposing a cash dividend of 0.40 yuan per 10 shares, totaling 465 million yuan, with a dividend payout ratio of 17.7% [6] Financial Summary - For 2025, the company is projected to achieve a net profit attributable to shareholders of 5.044 billion yuan, with year-on-year growth of 4.4%. The earnings per share (EPS) is expected to be 0.43 yuan, corresponding to a price-to-earnings (P/E) ratio of 9.2 times based on the closing price on September 1, 2025 [4][8] - The company has significant production capacity yet to be released, including 2 million tons of alumina and 250,000 tons of electrolytic aluminum, indicating substantial growth potential [4][5] Expansion in Indonesia - The company’s expansion in Indonesia is progressing rapidly, with the first phase of a 1 million ton alumina project already in production and the second phase under construction. The net profit from the Bintan alumina project reached 1.876 billion yuan in H1 2025, a 46.45% increase year-on-year, driven by rising alumina prices [5] Dividend and Share Buyback - The company has initiated a share buyback program, having repurchased approximately 65.08 million shares, representing about 0.56% of the total share capital, reflecting confidence in its development [6]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The Fed's September interest rate cut expectation is heating up, and the transition from the traditional off - season to the peak season in the domestic market supports aluminum prices [1]. - The domestic alumina supply - demand is expected to be loose, but the rising cost may limit the downside of prices; the electrolytic aluminum price is expected to be cautiously bullish; the aluminum alloy price is expected to be volatile and bullish [5][7][9]. Summary by Related Catalogs Alumina - **Supply - side Changes**: The construction of China Aluminum's bauxite mine and the start of the bauxite project in Qingzhen may reduce the domestic bauxite production and import in September. The domestic alumina production capacity utilization rate has decreased, and the production may decrease in September. Overseas projects may reduce the domestic alumina import in September [4][21][39]. - **Inventory Changes**: The inventory in ports has decreased, while the total inventory has increased [17][34]. - **Price and Cost**: The bauxite price has increased, pushing up the alumina production cost. The average full - cost of alumina production is about 2890 yuan/ton [21][26]. - **Investment Strategy**: It is recommended that investors wait and see, paying attention to the support level around 2800 - 3000 and the resistance level around 3300 - 3600 [5]. Electrolytic Aluminum - **Supply - side Changes**: Some domestic projects are expected to increase production capacity, but the overall production in September may decrease. Overseas projects may reduce the domestic import in September [6][65][68]. - **Inventory Changes**: The social inventory has increased, the bauxite inventory in ports has increased, and the inventory in LME has increased [51]. - **Price and Cost**: The theoretical weighted average full - cost of domestic electrolytic aluminum is about 16650 yuan/ton [65]. - **Investment Strategy**: It is recommended that investors go long on dips, paying attention to the support and resistance levels of SHFE aluminum and LME aluminum [7]. Aluminum Alloy - **Supply - side Changes**: The production of waste aluminum may increase, and the production of primary and recycled aluminum alloys may increase in September. The import of unforged aluminum alloy may increase [9][80][91]. - **Inventory Changes**: The inventory of recycled aluminum alloy enterprises' raw materials and finished products may increase [91]. - **Price and Cost**: The production of recycled aluminum alloy is close to loss, and the price is expected to be volatile and bullish [9]. - **Investment Strategy**: It is recommended that investors go long on dips for the main contract or short the spread between electrolytic aluminum and aluminum alloy, paying attention to the support and resistance levels [9].