香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部份內容而產生或因依賴該等內容 而引致之任何損失承擔任何責任。 China Hongqiao Group Limited 董事會認為，擬進行之購回符合本公司及股東的整體利益；擬進行之購回顯示本公司及其管理團隊 對本集團業務的未來前景充滿信心，並認同本集團的長遠價值。 1 股東及潛在投資者務請注意，本公司於市場上擬進行之購回將受市況規限，並將由董事會及╱或其 授權人士全權酌情決定。概不能保證任何擬進行之購回之時間、數量或價格。股東及潛在投資者於 買賣本公司股份時務須審慎行事。 承董事會命 中國宏橋集團有限公司 （根據開曼群島法例成立的有限公司） （股份代號：1378） 自願公告 根據購回授權於市場上購回股份的計劃 本公告乃由中國宏橋集團有限公司（「本公司」，連同其附屬公司統稱「本集團」）自願作出。 本公司董事會（「董事會」）謹此宣佈，基於對本集團未來前景及長遠投資價值的堅定信心，並考慮到 本集團的財務狀況及營運表現，董事會擬行使本公司股東於二零二五年五月七日舉行之股東週 ...

[Performance Highlights](index=1&type=section&id=Performance%20Highlights) The company's financial performance for the six months ended June 30, 2025, showed significant growth in revenue, gross profit, and net profit Performance Highlights for the Six Months Ended June 30, 2025 | Metric | Change | Amount (CNY) | | :--- | :--- | :--- | | Revenue | ▲ 10.1% | 81,039,092,000 | | Gross Profit | ▲ 16.9% | 20,805,191,000 | | Profit for the Period | ▲ 35.4% | 13,551,310,000 | | Net Profit Attributable to Owners of the Company | ▲ 35.0% | 12,361,046,000 | | Basic Earnings Per Share | ▲ 36.0% | 1.314 | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated financial statements, including income statement and balance sheet, for the reporting period [Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In H1 2025, the company achieved revenue of CNY 81.04 billion, a 10.1% increase, with profit for the period reaching CNY 13.55 billion, up 35.4%, driven by revenue growth and cost control, leading to a 36.0% rise in basic EPS to CNY 1.314 Condensed Consolidated Statement of Profit or Loss (For the Six Months Ended June 30) | Item | 2025 (CNY Thousand) | 2024 (CNY Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 81,039,092 | 73,592,249 | ▲ 10.1% | | Gross Profit | 20,805,191 | 17,801,761 | ▲ 16.9% | | Profit Before Tax | 17,763,982 | 13,870,989 | ▲ 28.1% | | Profit for the Period | 13,551,310 | 10,007,876 | ▲ 35.4% | | Profit Attributable to Owners of the Company | 12,361,046 | 9,154,911 | ▲ 35.0% | | Basic Earnings Per Share (CNY) | 1.314 | 0.966 | ▲ 36.0% | [Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were CNY 228.46 billion, slightly down from year-end 2024, with net assets at CNY 116.32 billion and cash increasing to CNY 48.74 billion, while current liabilities rose due to maturing debt Summary Statement of Financial Position | Item | As of June 30, 2025 (CNY Thousand) | As of December 31, 2024 (CNY Thousand) | | :--- | :--- | :--- | | **Total Assets** | **228,463,164** | **229,165,032** | | Non-current Assets | 125,597,771 | 119,340,473 | | Current Assets | 102,865,393 | 109,824,559 | | **Total Liabilities** | **112,138,581** | **110,551,534** | | Non-current Liabilities | 32,379,169 | 33,568,985 | | Current Liabilities | 79,759,412 | 76,982,549 | | **Total Equity** | **116,324,583** | **118,613,498** | [Notes to the Financial Statements](index=7&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, offering further insights into specific accounts and transactions [Note 4: Revenue](index=8&type=section&id=Note%204.%20Revenue) Total revenue for H1 2025 was CNY 81.04 billion, primarily from aluminum product sales, with liquid aluminum alloy and alumina products contributing CNY 48.74 billion and CNY 20.65 billion respectively, while China accounted for over 92% of revenue Revenue by Product and Region (For the Six Months Ended June 30) | Revenue Source | 2025 (CNY Thousand) | Proportion | | :--- | :--- | :--- | | **By Product** | | | | Liquid Aluminum Alloy | 48,738,576 | 60.1% | | Alumina Products | 20,654,946 | 25.5% | | Aluminum Alloy Processed Products | 8,074,302 | 10.0% | | Others | 3,571,268 | 4.4% | | **By Region** | | | | China | 75,358,618 | 93.0% | | India | 2,709,968 | 3.3% | | Others | 2,970,506 | 3.7% | [Notes 5-6: Expenses and Fair Value Changes](index=9&type=section&id=Notes%205-6.%20Expenses%20and%20Fair%20Value%20Changes) Other expenses significantly decreased to CNY 274 million due to reduced impairment losses on property, plant, and equipment, while fair value losses on financial instruments expanded to CNY 2.11 billion, mainly from convertible bond derivatives - Other expenses significantly decreased year-on-year, primarily due to impairment losses on property, plant, and equipment falling from **CNY 534 million** in the prior period to **CNY 59 million** in the current period[14](index=14&type=chunk) - Fair value changes on financial instruments resulted in an expanded loss of **CNY 2.11 billion**, mainly impacted by a **CNY 2.56 billion** loss from fair value changes of the convertible bond derivative component[14](index=14&type=chunk) [Note 8: Dividends](index=10&type=section&id=Note%208.%20Dividends) The Board did not recommend an interim dividend for H1 2025, but the final dividend for 2024, totaling approximately CNY 8.67 billion (HKD 102 cents per share), was significantly higher than the previous year - The Board did not recommend an interim dividend for **2025**[16](index=16&type=chunk) - The total final dividend for **2024** recognized during the period was approximately **CNY 8.67 billion**, representing a significant year-on-year increase[16](index=16&type=chunk) [Note 10: Property, Plant and Equipment](index=11&type=section&id=Note%2010.%20Property%2C%20Plant%20and%20Equipment) During the period, the Group significantly increased investment in property, plant, and equipment, spending approximately CNY 7.70 billion on new production lines and plants, a 59.8% increase, while impairment losses on equipment substantially decreased to CNY 59 million - The Group invested approximately **CNY 7.70 billion** in constructing new production lines and plants, a **59.8%** year-on-year increase (compared to CNY 4.82 billion in the prior period)[19](index=19&type=chunk) - Impairment losses on property, plant, and equipment amounted to approximately **CNY 58.61 million**, a significant reduction from **CNY 534 million** in the prior period[20](index=20&type=chunk) [Notes 15-16: Share Capital and Commitments](index=13&type=section&id=Notes%2015-16.%20Share%20Capital%20and%20Commitments) As of June 30, 2025, the company had 9.288 billion shares issued, having repurchased and cancelled 187.23 million shares for CNY 2.42 billion, and has significant capital expenditure commitments of CNY 7.4 billion and a USD 1.78 billion performance guarantee for the Simandou project - During the period, the company repurchased and cancelled a total of **187,229,500** of its own ordinary shares on the Stock Exchange for a total consideration of approximately **CNY 2.42 billion**[27](index=27&type=chunk)[28](index=28&type=chunk) - The Group has significant future capital commitments, including approximately **CNY 7.40 billion** for property, plant, and equipment capital expenditures, and a performance guarantee not exceeding **USD 1.78 billion** for the Simandou iron ore project[30](index=30&type=chunk) [Chairman's Report](index=15&type=section&id=Chairman%27s%20Report) The Chairman's Report provides an overview of the company's performance, strategic initiatives, and future outlook amidst global economic conditions [Performance Review and Operating Strategy](index=15&type=section&id=Performance%20Review%20and%20Operating%20Strategy) Despite global economic slowdown, the Group achieved strong H1 performance with 35.0% net profit growth, driven by robust China market demand and rising aluminum prices, leveraging its integrated industrial chain and cost control advantages while transforming towards high-end, intelligent, and green manufacturing - Despite global economic slowdown, China's economy showed steady momentum and cyclical improvement, with growing demand for aluminum in new energy vehicles and renewable energy sectors supporting the company's performance[31](index=31&type=chunk)[32](index=32&type=chunk) - Leveraging its integrated industrial chain and cost control advantages, the company achieved high profitability amidst rising aluminum prices, demonstrating strong risk resilience[33](index=33&type=chunk) - The company's strategy focuses on industrial optimization and upgrading, perfecting the complete industrial chain from bauxite to recycled aluminum, and promoting low-carbon transformation[34](index=34&type=chunk) [Green Development and Technological Innovation](index=16&type=section&id=Green%20Development%20and%20Technological%20Innovation) The Group released its Carbon Reduction Action Report, setting "25 • 55 Dual Carbon" goals for operational carbon peaking by 2025 and carbon neutrality by 2055, while achieving key technological breakthroughs in electrolytic cell measurement systems and lightweight chassis components - Released the "Carbon Reduction Action Report," proposing the "**25 • 55 Dual Carbon**" goals, committing to carbon peaking by **2025** and carbon neutrality by **2055**[35](index=35&type=chunk) - The Binzhou Aluminum Industry Advanced Manufacturing Shandong Provincial Laboratory opened, promoting collaborative innovation across the industrial chain[36](index=36&type=chunk) - The "Electrolytic Cell Dual-Level and Cell Temperature Automatic Measurement System" is operational, and lightweight chassis components have achieved mass delivery, demonstrating significant technological innovation achievements[36](index=36&type=chunk) [Capital Market Performance and Outlook](index=18&type=section&id=Capital%20Market%20Performance%20and%20Outlook) The Group's subsidiaries achieved AAA credit ratings, successfully issued CNY 8.1 billion in domestic bonds and USD 600 million in overseas bonds, and completed a pioneering "convertible bond + share repurchase" financing, demonstrating market confidence and a commitment to stable dividends despite future uncertainties - Subsidiaries Shandong Hongqiao and Weiqiao Aluminum & Electricity both had their corporate credit ratings upgraded to **AAA**[38](index=38&type=chunk) - Successfully issued domestic bonds totaling **CNY 8.1 billion** and USD bonds totaling **USD 600 million**[38](index=38&type=chunk) - Innovatively issued **USD 300 million** convertible bonds concurrently with a share repurchase, marking the first "convertible bond + repurchase" case in the Hong Kong stock market[38](index=38&type=chunk) - Looking ahead to the second half, the company will continue to advance steadily and is committed to rewarding shareholders with stable full-year dividends[39](index=39&type=chunk) [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed analysis of the company's operational performance, financial position, and future outlook, including industry trends and key financial metrics [Industry Review](index=19&type=section&id=Industry%20Review) In H1 2025, global electrolytic aluminum prices rose, with LME and SHFE average prices increasing by 6.0% and 1.9% respectively, while global primary aluminum production grew 1.8% and consumption 3.1%, with China accounting for approximately 60% of both and showing stronger consumption growth Global and China Primary Aluminum Market Data for H1 2025 | Metric | Global | China | China's Share of Global | | :--- | :--- | :--- | :--- | | Primary Aluminum Production | 36.59 million tonnes (▲1.8%) | 21.84 million tonnes (▲2.4%) | 59.7% | | Primary Aluminum Consumption | 36.72 million tonnes (▲3.1%) | 22.97 million tonnes (▲4.3%) | 62.6% | - The average LME three-month aluminum price was approximately **USD 2,546/tonne**, up approximately **6.0%** year-on-year[40](index=40&type=chunk) - The average SHFE three-month aluminum price was approximately **CNY 20,226/tonne**, up approximately **1.9%** year-on-year[40](index=40&type=chunk) [Business and Financial Performance Analysis](index=20&type=section&id=Business%20and%20Financial%20Performance%20Analysis) H1 2025 revenue grew 10.1% to CNY 81.04 billion, with net profit attributable to owners increasing 35.0% to CNY 12.36 billion, driven by higher volumes and prices of aluminum alloy and alumina products, leading to an overall gross profit margin improvement from 24.2% to 25.7% Key Product Sales Volume and Average Selling Price Changes (Year-on-Year) | Product | Sales Volume Change | Average Selling Price Change | | :--- | :--- | :--- | | Aluminum Alloy Products | ▲ 2.4% | ▲ 2.7% | | Alumina Products | ▲ 15.6% | ▲ 10.3% | | Aluminum Alloy Processed Products | ▲ 3.5% | ▲ 2.9% | Gross Profit Margin Performance by Product Segment | Product | H1 2025 Gross Profit Margin | H1 2024 Gross Profit Margin | Change (Percentage Points) | | :--- | :--- | :--- | :--- | | Aluminum Alloy Products | 25.2% | 24.6% | ▲ 0.6 | | Alumina | 28.8% | 25.4% | ▲ 3.4 | | Aluminum Alloy Processed Products | 23.3% | 21.0% | ▲ 2.3 | | **Total** | **25.7%** | **24.2%** | **▲ 1.5** | [Cost and Expense Analysis](index=22&type=section&id=Cost%20and%20Expense%20Analysis) During the period, the Group effectively controlled expenses, with sales and distribution expenses decreasing by 3.4% due to lower freight unit costs, administrative expenses falling by 5.4% due to reduced R&D, and finance costs significantly decreasing by 17.7% due to optimized debt structure and lower financing rates Key Expense Item Changes (Year-on-Year) | Expense Item | H1 2025 (CNY Thousand) | Change | | :--- | :--- | :--- | | Sales and Distribution Expenses | 354,125 | ▼ 3.4% | | Administrative Expenses | 2,321,954 | ▼ 5.4% | | Finance Costs | 1,284,152 | ▼ 17.7% | [Liquidity, Financial Resources and Capital Structure](index=22&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) As of period-end, cash and cash equivalents increased to CNY 48.74 billion, with strong net cash inflow from operating activities at CNY 22.31 billion, while capital expenditures surged 77.9% to CNY 9.89 billion, and the asset-liability ratio slightly rose to 49.1% with optimized debt structure - Net cash inflow from operating activities was approximately **CNY 22.31 billion**, with cash and cash equivalents increasing by **8.9%** from the beginning of the year to **CNY 48.74 billion**[50](index=50&type=chunk)[51](index=51&type=chunk) - Capital expenditures were approximately **CNY 9.89 billion**, a **77.9%** year-on-year increase, primarily for projects such as the Yunnan Green Aluminum Innovation Industrial Park, lightweight materials base, and new energy initiatives[51](index=51&type=chunk) - The asset-liability ratio was approximately **49.1%**, a slight increase from **48.2%** at the beginning of the year, with total liabilities of approximately **CNY 112.14 billion**[57](index=57&type=chunk) - Debt is primarily denominated in RMB, accounting for approximately **79.1%** of total debt; foreign currency debt accounts for approximately **20.9%**[59](index=59&type=chunk) [Outlook](index=27&type=section&id=Outlook) Looking ahead, despite global economic challenges, China's economy shows strong resilience, and the Group will focus on high-quality aluminum industry development, driven by technological innovation and green transformation, to break through in high-end aluminum alloy materials, deepen applications in new strategic areas, accelerate digitalization, and optimize global industrial layout for sustainable value creation - The company will prioritize technological innovation and green transformation as core drivers, focusing on breakthroughs in **high-end aluminum alloy material research and development**[67](index=67&type=chunk) - Accelerate digital and intelligent transformation and upgrading, establish industry-leading benchmarks, and enhance the supply chain's independent and controllable capabilities[67](index=67&type=chunk) - Optimize global industrial layout, build a more resilient supply chain system, and create sustainable value for investors[67](index=67&type=chunk) [Other Company Information and Disclosures](index=26&type=section&id=Other%20Company%20Information%20and%20Disclosures) This section provides additional company information and disclosures, including details on share repurchases, debt instruments, and corporate governance practices [Share Repurchases](index=31&type=section&id=Share%20Repurchases) For the six months ended June 30, 2025, the company repurchased and cancelled 187.23 million shares for approximately HKD 2.6 billion, reflecting the Board's confidence in the company's long-term strategy and growth, with one repurchase tranche synchronized with convertible bond issuance Share Repurchase Details for H1 2025 | Month of Repurchase | Number of Shares | Total Consideration Paid (HKD) | | :--- | :--- | :--- | | January 2025 | 11,294,000 | 134,428,179.50 | | February 2025 | 355,500 | 4,544,055.90 | | March 2025 | 45,230,500 | 693,738,605.60 | | April 2025 | 88,928,000 | 1,201,466,599.10 | | May 2025 | 41,421,500 | 577,322,388.10 | | **Total** | **187,229,500** | **2,611,499,828.20** | - The Board believes that the share repurchases reflect confidence in the company's long-term strategy and growth, and are in the overall best interests of the company and its shareholders[77](index=77&type=chunk) [Debt Instruments](index=32&type=section&id=Debt%20Instruments) The company adjusted the conversion price of its 2021 convertible bonds to HKD 5.68 per share due to dividends, issued new USD 300 million convertible bonds due 2030 with a 1.50% coupon, and actively managed its debt portfolio by issuing USD 600 million in senior unsecured notes and redeeming USD 300 million in maturing notes - Due to the declaration of the **2024** final dividend, the conversion price of the **2021** convertible bonds was adjusted from **HKD 6.14** per share to **HKD 5.68** per share[83](index=83&type=chunk) - In March **2025**, convertible bonds with a total principal amount of **USD 300 million**, maturing in **2030**, and bearing an interest rate of **1.50%** were issued[85](index=85&type=chunk) - During the period, two tranches of senior unsecured notes totaling **USD 600 million** were issued, and a **USD 300 million** maturing note was fully redeemed[87](index=87&type=chunk)[91](index=91&type=chunk) [Corporate Governance](index=31&type=section&id=Corporate%20Governance) The Audit Committee reviewed the interim results, confirming compliance with accounting standards, though a deviation exists where Mr. Zhang Bo serves as both Chairman and CEO, which the Board deems beneficial for stable business development given his extensive experience - The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's interim results for the six months ended **June 30, 2025**[76](index=76&type=chunk) - There is a deviation from the Corporate Governance Code: the roles of Chairman and Chief Executive Officer are not segregated, both held by **Mr. Zhang Bo**[92](index=92&type=chunk) - The Board believes that having the same individual serve as Chairman and Chief Executive Officer is beneficial for the Group's continuous and stable business development, and the current Board composition ensures a balance of power[92](index=92&type=chunk)

Core Viewpoint - China Hongqiao (01378) has seen a significant increase in stock price, reaching a historical high of 23.04 HKD, driven by strong mid-year profit expectations and favorable market conditions [1] Group 1: Financial Performance - The company anticipates a net profit attributable to shareholders of approximately 12.36 billion HKD for the first half of the year, representing a year-on-year growth of around 35% [1] - The substantial profit increase is primarily attributed to the rise in aluminum prices compared to the previous year, alongside a decrease in the cost of thermal coal [1] Group 2: Business Operations - China Hongqiao is the second-largest producer of aluminum and alumina globally, with a fully integrated green aluminum industry chain [1] - The company has diversified upstream production capabilities in Guinea, Shandong, and Indonesia, and is in the process of relocating approximately 3 million tons of capacity to Yunnan, which is expected to increase the proportion of green electricity aluminum to 46% [1] Group 3: Market Outlook - The company has expanded its downstream operations into automotive lightweight materials and environmental recycling businesses, indicating a strong position in the industry [1] - CICC has initiated coverage on China Hongqiao with an "outperform" rating and a target price of 23.62 HKD, reflecting confidence in its industry standing and attractive dividend returns [1]

Core Viewpoint - China Hongqiao (01378) has seen its stock price rise over 3%, reaching a historical high of 23.04 HKD, driven by strong mid-year performance expectations and favorable market conditions [1] Financial Performance - The company anticipates a net profit attributable to shareholders of approximately 12.36 billion HKD for the first half of the year, representing a year-on-year increase of around 35% [1] - The significant profit growth is primarily attributed to the rise in aluminum prices compared to the previous year, alongside a decrease in the cost of thermal coal [1] Business Operations - China Hongqiao is the second-largest producer of aluminum and alumina globally, with a fully integrated green aluminum industry chain [1] - The company’s operations include power generation, bauxite mining, alumina, primary aluminum, aluminum processing, and recycled aluminum production [1] - The company is diversifying its upstream capacity supply with operations in Guinea, Shandong, and Indonesia, and is in the process of relocating approximately 3 million tons of capacity to Yunnan, which is expected to increase the proportion of green electricity aluminum to 46% [1] Market Position and Outlook - The company has expanded its downstream business into automotive lightweight materials and environmental recycling [1] - CICC has initiated coverage on China Hongqiao with an "outperform" rating and a target price of 23.62 HKD, reflecting confidence in its industry position and attractive dividend returns [1]

Core Viewpoint - CICC has initiated coverage on China Hongqiao with an "outperform" rating, setting a target price of HKD 23.62, which corresponds to a projected P/E ratio of approximately 8 times for 2026 [1] Financial Projections - Expected earnings per share (EPS) for 2025 and 2026 are projected to be HKD 2.63 and HKD 2.70, respectively [1] - Anticipated dividends per share for 2025 and 2026 are estimated at HKD 1.45 and HKD 1.49, respectively [1] Company Overview - China Hongqiao is the second-largest producer of aluminum and alumina globally, with a fully integrated green aluminum supply chain [1] - The company’s operations encompass power generation, bauxite mining, alumina, primary aluminum, aluminum processing, and recycled aluminum production and sales [1] Production Capacity and Sustainability - The company has diverse upstream production capacity in Guinea, Shandong, and Indonesia, and is in the process of relocating approximately 3 million tons of capacity to Yunnan [1] - This relocation is expected to increase the proportion of green electricity aluminum to 46% [1] Market Position and Business Expansion - China Hongqiao has expanded its downstream business into lightweight materials for the automotive sector and environmental recycling [1] - The company is viewed positively for its industry position and attractive dividend returns [1]

Core Viewpoint - China Hongqiao (01378) has seen its stock price rise over 3%, reaching a new high of 22.62 HKD, driven by a significant increase in expected net profit for the first half of the year [1] Financial Performance - The company anticipates a net profit attributable to shareholders of approximately 12.36 billion HKD for the first half of the year, representing a year-on-year increase of around 35% [1] - The substantial growth in performance is primarily attributed to the rise in aluminum prices compared to the previous year, alongside a decrease in the cost of thermal coal [1] Business Operations - Electrolytic aluminum is the main source of revenue and profit for the company, while alumina is primarily produced for self-use, with some portion sold externally [1]

Group 1 - China Hongqiao (01378) saw its stock price increase over 3%, reaching a new high of 22.62 HKD, with a current trading price of 22.32 HKD and a trading volume of 339 million HKD [1] - The company expects a net profit attributable to shareholders of approximately 12.359 billion RMB for the first half of the year, representing a year-on-year increase of around 35% [1] - The significant growth in the company's performance is primarily attributed to the year-on-year increase in aluminum prices, coupled with a decrease in the cost of thermal coal [1] Group 2 - According to Guolian Minsheng Securities, domestic electrolytic aluminum production capacity is nearing its ceiling, with limited potential for new capacity additions in the future [1] - The demand side is supported by sectors such as the power grid and new energy vehicles, which are expected to show resilience, leading to a gradual emergence of a supply-demand gap in electrolytic aluminum [1] - The China Nonferrous Metals Industry Association announced on July 29 that it will strictly control the new production capacity of alumina, indicating a potential slowdown in the pace of new capacity coming online, which may improve the current overcapacity situation [1]

Group 1 - China Hongqiao (01378) saw its stock price rise over 3%, reaching a new high of 22.62 HKD, with a current price of 22.32 HKD and a trading volume of 339 million HKD [1] - The company issued a profit warning, expecting a net profit attributable to shareholders of approximately 12.359 billion CNY for the first half of the year, representing a year-on-year increase of about 35% [1] - The significant growth in performance is primarily attributed to the year-on-year increase in aluminum prices, coupled with a decrease in the cost of thermal coal [1] Group 2 - Electrolytic aluminum is the main source of revenue and profit for the company, while alumina is mainly produced for self-use, with some external sales [1] - Guotai Junan Securities reported that domestic electrolytic aluminum production capacity is nearing its ceiling, with limited future capacity additions expected; demand from the power grid and new energy vehicles is expected to support resilience in demand [1] - The China Nonferrous Metals Industry Association indicated on July 29 that it will strictly control the addition of new alumina production capacity, suggesting that the pace of new capacity coming online may slow down, improving the oversupply situation in the medium to long term [1]

Summary of Key Points from Conference Call Records Industry Overview - **Manufacturing Sector**: China is undergoing a new round of supply-side reforms, focusing on eliminating inefficient capacity in emerging industries like automotive and electronics, with total manufacturing debt growth expected to slow to 2%-3% [1][3] - **High-Quality Nutritional Chemical Industry**: The industry has significant growth potential due to rising health product demand and high technical barriers, with New Hope Liuhe being a leading player [5][16] - **Aluminum Industry**: China Hongqiao is one of the largest aluminum producers globally, benefiting from high electrolytic aluminum prices and cost advantages [1][22] Company-Specific Insights SF Express (顺丰) - **Rating Upgrade**: SF Express has been upgraded to "overweight" due to its leading position in the high-end express market, operational efficiency improvements, and technological innovations, with expected profit growth of 11%-12% in Q2 [1][4][10] - **Investment Timing**: Current market conditions present a good buying opportunity, with projected free cash flow yields of 6.5%-8% from 2025 to 2027 [13] - **Risks**: The company faces macroeconomic risks that could impact its international and express business revenues, particularly if economic growth slows in 2025 [14][15] New Hope Liuhe (新和成) - **Market Position**: New Hope Liuhe holds approximately 15% of the global methionine market and 30% of the vitamin E market, with a positive outlook on its growth potential [16][19] - **Capacity Growth**: Expected capacity growth in the next three to four years is below 5%, aligning with global demand growth, indicating minimal supply pressure [17] - **Financial Health**: The company has a strong financial position, with a projected net cash status and positive free cash flow even during industry downturns [19] China Hongqiao (中国宏桥) - **Competitive Advantages**: The company benefits from high electrolytic aluminum prices, cost advantages from integrated operations, and a high dividend policy, with a one-year expected P/E ratio close to 7 times [1][22][23] - **Future Projects**: Participation in the Simandou iron ore project is expected to contribute significantly to profits, with an estimated 1.3 million tons of iron ore contributing approximately 1.7 billion in profits by 2027 [23] Financial Policies and Market Dynamics - **New Financial Policies**: Recent policies aim to control overcapacity and credit risks, including regulations on accounts payable management and rational investment by local governments [2][3] - **Investment Trends**: Approximately 74% of industrial sectors have slowed investment growth, but demand remains stable, with financial policies supporting a gradual recovery [7][8] Additional Considerations - **Express Delivery Pricing**: Recent price increases in the express delivery sector, particularly in Guangdong, need to be monitored for sustainability and impact on midstream profits [9][12] - **Market Sentiment**: The overall market sentiment and fundamental changes in the express delivery industry will be influenced by pricing strategies and demand fluctuations [12]

Core Viewpoint - The company has established a complete aluminum product industry chain, making it one of the world's leading aluminum manufacturers, with a focus on vertical integration and sustainability [1][4]. Group 1: Industry Chain and Production Capacity - The company has built a complete closed-loop industry chain from bauxite mining to aluminum deep processing, including recycling and automotive components [1]. - The current electrolytic aluminum production capacity is 6.459 million tons, ranking second in China, while alumina production capacity is 21 million tons [1][2]. - The company is implementing a "north aluminum south move" strategy to adapt to green trends, with plans to relocate production capacity from Shandong to Yunnan, targeting 3.451 million tons in Shandong and 3.008 million tons in Yunnan by 2027 [2]. Group 2: Cost Management and Supply Chain - The company has a self-sufficient power generation rate of approximately 50% due to its self-built thermal power plants, which helps in cost management [2]. - The alumina required for production is primarily sourced from self-production in Shandong and external procurement in Yunnan, with bauxite imported from Guinea and stable supply channels established in Australia and Indonesia [2][3]. Group 3: Financial Performance and Future Outlook - The company’s alumina production capacity is 21 million tons, with significant contributions from both domestic and overseas projects, leading to a projected revenue increase of 34.7% and gross profit growth of 142.2% in 2024 [3]. - The company aims to enhance its risk resilience and performance stability through vertical integration and proactive overseas resource acquisition [4]. - Expected net profits for the company from 2025 to 2027 are projected to be 22.64 billion, 24.21 billion, and 25.39 billion yuan, respectively, with a corresponding EPS of 2.44, 2.61, and 2.73 yuan [4].