中国宏桥 2025042320250416 摘要 • 中国宏桥拥有完善的一体化产业链，包括国内 1,750 万吨和印尼 200 万吨 氧化铝产能，以及几内亚 5,000 万吨铝土矿产能（预计 2025 年增至 6,500 万吨），有效降低风险，保障经营和业绩增长。 • 公司重视股东回报，自上市以来累计分红 524 亿元，2024 年分红 140 亿 元，股息支付率 63%，股息率超 10%，与中国神华类似，具备估值重塑 潜力。 • 通过北铝南移，中国宏桥提高水电比例，降低能源成本，应对煤炭价格波 动和环保政策压力，同时享受云南水电宽松及价格优势，优化成本结构， 增强绿色溢价。 • 欧盟碳关税（CBAM）将增加每吨产品约 650 元成本，低碳铝产品将具有 绿色溢价优势，提升中国宏桥出口竞争力，推动公司优化低碳生产工艺。 • 中国将电解铝纳入国内碳交易市场，云南水电铝绿证可进入碳交易，每吨 节约约 10 万吨碳，产生约 500 元成本收益，表明公司在长期布局和稳健 资产方面取得重要进展。 Q&A 中国宏桥在过去一年中股价翻倍的原因是什么？ • 中国宏桥完成槽型升级改造，使用 600 千安槽型，显著优于海外资产，降 ...

Group 1: Market Outlook - Concerns about a global recession are easing, leading HSBC to favor copper and aluminum sectors in Asia [1] - HSBC expects significant short-term rebounds in prices of copper and aluminum commodities, supported by new stimulus policies in China [1][2] - The market's fears of a recession have been deemed overblown, with panic selling exceeding reasonable levels [1] Group 2: Copper Market Analysis - Recent data shows improved operating rates in downstream industries for copper and aluminum, indicating a seasonal demand recovery [2] - Tight supply conditions are confirmed by negative spot processing fees (TC/RC), and China's trade measures against the US will reduce scrap copper imports, impacting refined copper output [2] Group 3: Aluminum Market Outlook - The operational capacity for aluminum is nearing a ceiling of 45 million tons, with limited room for new supply [2] - If demand increases significantly due to China's stimulus policies, a supply shortage may occur in the aluminum market [2] Group 4: Company Specifics - China Hongqiao - HSBC maintains a target price of HKD 17.10 for China Hongqiao, using a forward P/E ratio of 7.5x based on projected EPS of RMB 2.16 for 2025 [3] - The target P/E is significantly above the historical average since 2018, indicating potential upside of over 30% [3] - HSBC's "buy" rating for China Hongqiao is supported by strong fundamentals and an attractive dividend yield of approximately 10% [3]

Financial Performance - Revenue for the fiscal year 2024 reached RMB 156.17 billion, a 17.0% increase from RMB 133.62 billion in 2023[4] - Gross profit for 2024 was RMB 42.16 billion, with a gross margin of 27.0%, up from 15.7% in 2023[4] - Net profit attributable to shareholders for 2024 was RMB 22.37 billion, representing a 95.5% increase from RMB 11.46 billion in 2023[4] - The company's revenue for the year was approximately RMB 156.17 billion, an increase of about 16.9% year-on-year[15] - Gross profit reached approximately RMB 42.16 billion, reflecting a year-on-year increase of about 101.2%[15] - Net profit attributable to shareholders was approximately RMB 22.37 billion, up about 95.2% compared to the previous year[15] - The basic earnings per share were approximately RMB 2.3611, compared to RMB 1.2095 in the same period last year[15] - The group's revenue for the year ended December 31, 2024, was approximately RMB 156.17 billion, an increase of about 16.9% year-on-year, driven by higher sales prices and volumes of aluminum alloy and alumina products[27] - The net profit attributable to shareholders for the year was approximately RMB 22.37 billion, representing a significant increase of about 95.2% compared to the previous year, mainly due to increased sales prices and reduced procurement costs of key raw materials[28] Assets and Liabilities - Total assets increased to RMB 229.17 billion in 2024, compared to RMB 200.32 billion in 2023, reflecting a growth of 14.4%[5] - The group's cash and cash equivalents increased by approximately 41.1% to about RMB 44.77 billion, primarily due to increased net cash inflow from operating activities[35] - The group's total liabilities as of December 31, 2024, were approximately RMB 110,551,534,000, compared to RMB 94,063,640,000 as of December 31, 2023, resulting in a debt-to-asset ratio of approximately 48.2%[43] - Total liabilities rose to RMB 110,551,534 from RMB 94,063,640, indicating an increase of about 17.5%[103] Market and Product Development - The company plans to expand its market presence in the renewable energy sector, particularly in aluminum demand for electric vehicles and solar energy[12] - New product development initiatives are focused on enhancing the quality and sustainability of aluminum production[12] - The company anticipates continued growth in demand for aluminum driven by government policies supporting green energy initiatives[12] - The overall profitability of the alumina industry has significantly improved, with alumina prices reaching a nearly ten-year high during the year[12] - Aluminum alloy product sales volume reached approximately 5.84 million tons, a year-on-year increase of about 1.5%, with an average selling price rising approximately 6.6% to about RMB 17,550 per ton[27] - The group's alumina product revenue was approximately RMB 37.35 billion, a year-on-year increase of about 40.6%, driven by higher sales volumes and prices[30] Corporate Governance and Management - The company has received multiple awards for corporate governance and sustainable development, including recognition as one of the "Most Admired Companies" in Asia[19] - The company is committed to maintaining high standards of corporate governance through the involvement of independent directors and specialized committees[81][84] - The company’s board includes members with significant experience in the aluminum industry, which supports strategic decision-making and market expansion efforts[83][86] - The board of directors consists of four executive directors, four non-executive directors, and four independent non-executive directors, ensuring a balanced governance structure[177] - The board is responsible for leading and supervising the business strategy and performance of the group, ensuring compliance with applicable laws and regulations[178] Environmental and Social Responsibility - The company has established a dedicated environmental protection department to oversee compliance with environmental regulations and standards in China[55] - The company has installed dust removal and desulfurization facilities at its power plants to reduce emissions of pollutants, achieving ultra-low emissions across all coal-fired units[55] - The company donated RMB 428,078,000 during the year ending December 31, 2024, primarily for rural revitalization, education, and healthcare projects[130] Financing and Capital Management - The company successfully issued short-term financing bonds and corporate bonds totaling RMB 12.6 billion, along with USD 300 million in senior unsecured bonds, which were oversubscribed by seven times[20] - The company issued $330 million of 7.05% senior unsecured notes due in 2028, with proceeds intended for refinancing existing offshore debt and general corporate purposes[64] - The company has agreed to issue convertible bonds with an initial principal of $300,000,000, with a preliminary conversion price of HKD 20.88 per share[65] - The net proceeds from the issuance of the convertible bonds are approximately $294,584,687, intended for refinancing existing offshore debt and general corporate purposes[65] Risk Management - The company is facing risks related to domestic and international economic conditions, credit policies, and raw material prices, which are managed through a comprehensive risk management system[54] - The company has faced major risks and uncertainties, which are detailed in the management discussion and analysis section of the annual report[167] Employee Development - The company emphasizes the importance of employee development, providing training programs and competitive compensation to enhance workforce efficiency[58] - All directors are required to undergo training to enhance their understanding of the company's culture and operations, with training costs covered by the company[186] Shareholder Information - The company proposed a final dividend of HKD 1.02 per share, totaling HKD 1.61 per share for the fiscal year, compared to HKD 0.63 per share last year[15] - As of December 31, 2024, major shareholders include Shih Ping Trust Company holding 6,090,031,073 shares, representing approximately 64.27% of the total issued share capital[145] - Zhang Hongxia and Zhang Yanhong, as concert parties, collectively hold 6,098,901,073 shares, accounting for approximately 64.36% of the total issued share capital[145] Compliance and Legal Matters - The company has maintained directors and officers liability insurance for the year ending December 31, 2024, providing appropriate protection against legal actions[154] - The company has complied with all relevant disclosure requirements under the Listing Rules regarding connected transactions[158] - The company has adopted a code of conduct for directors' securities transactions that meets or exceeds the standards set by the standard code[160]

Core Viewpoint - China Hongqiao has successfully issued convertible bonds with an oversubscription of 8 times, reflecting strong investor confidence and a robust financial strategy aimed at optimizing its debt structure [1][4][6]. Group 1: Financial Performance - In the fiscal year 2024, China Hongqiao reported revenue of 156.17 billion RMB, a year-on-year increase of 16.9%, and a net profit attributable to shareholders of 22.37 billion RMB, up 95.2% [2][9]. - The company achieved a record high in both earnings and dividends, with a basic earnings per share of 2.36 RMB and total dividends of 1.61 HKD per share [2][9]. Group 2: Debt Optimization - The issuance of convertible bonds is part of the company's strategy to optimize its financing structure, with a significant reduction in short-term debts from 7 billion RMB in 2023 to 3 billion RMB in 2024 [6][5]. - The company has increased its unrestricted cash from 31.7 billion RMB in 2023 to 44.77 billion RMB in 2024, enhancing liquidity [6][5]. - The average coupon rate for 11 medium-term notes issued in 2024 has decreased to 3.2%, down from 4.92% in 2023, indicating a reduction in financing costs [6][7]. Group 3: Market Reception and Future Outlook - The convertible bond issuance attracted nearly 100 high-quality investors, with total orders exceeding 2.5 billion USD, marking a historic breakthrough in the Hong Kong market [1][3]. - Following the announcement of the convertible bonds, the company's stock price remained stable above 15 HKD per share, demonstrating its defensive and offensive attributes in the market [3][4]. - The company is expanding its global market presence, significantly increasing exports to countries like Vietnam and the UAE, and optimizing costs through its supply base in Guinea [11].

更多资料加入知识星球：水木调研纪要 关注公众号：水木Alpha Alumina – Hongqiao has 19+mntpa alumina capacity and sold 10.92mnt alumina in 2024, +5.3% YoY. The annual purchased alumina volume is ~3mnt in Yunnan. The alumina price has decreased to ~Rmb3,500/t and mgmt. believes this price level is reasonable for alumina. Benefiting from high alumina price, the net profit of the Indonesia alumina project reached US$400mn+ in 2024. Bauxite – In 2024, 74%/9%/17% of Hongqiao's bauxite consumption was from Guinea/Indonesia/Australia respecti ...

March 14, 2025 01:06 PM GMT China Hongqiao Group | Asia Pacific 2H24 profit in-line; higher dividend payout Hongqiao reported a 95% YoY increase in FY24 net profit, to Rmb22.3bn, in-line with market expectation. The implied 2H24 earnings were up 47% YoY and 44% HoH, to Rmb13bn, on strong earnings increase from alumina segments on surging prices in 2H24 due to tight supply globally as well as solid profit contribution from aluminum in 2H24. GPM expanded to 30% in 2H24 vs. 24% in 1H24. Balance sheet improved ...

Core Viewpoint - China Hongqiao has announced a significant increase in its dividend for 2024, reflecting strong financial performance and a commitment to high shareholder returns [1][5] Financial Performance - In 2024, China Hongqiao achieved revenue of 156.17 billion yuan, a year-on-year increase of 16.9%, with gross profit reaching 42.16 billion yuan, up 101.2% [1] - The net profit attributable to shareholders was 22.37 billion yuan, representing a 95.2% increase year-on-year, with gross margin and net profit margin improving to 27% and 14.33% respectively [1] - The company's return on equity (ROE) reached a historical high of 20.75%, an increase of 8.33 percentage points year-on-year [1] Dividend Strategy - The board declared a final dividend of 1.02 HKD per share, leading to a total annual dividend of 1.61 HKD per share, a remarkable increase of 156% year-on-year, marking a historical high [1] - The company maintains a strong cash position with cash equivalents amounting to 44.77 billion yuan as of December 2024, supporting its high dividend policy [1] Product Performance - China Hongqiao's three core product lines experienced volume and price increases, contributing to stable revenue growth [2] - Revenue from aluminum alloy products was 102.43 billion yuan, up 8.23%, while aluminum processing products and alumina revenues increased by 35.4% and 40.64% respectively [2] - The overall gross margin for the company's products was approximately 27%, an increase of 11.3 percentage points year-on-year, with specific margins for aluminum alloy, aluminum processing, and alumina products improving significantly [3] Market Demand and Strategy - Global primary aluminum production and consumption showed stable growth, with China accounting for a significant share of the market [3] - The company is focused on high-quality development, emphasizing long-term strategies and innovation, while enhancing operational efficiency through digital transformation [3] - China Hongqiao is actively pursuing ESG initiatives and has received recognition for its efforts in sustainable development and resource recycling [4] Shareholder Returns and Market Outlook - The company has a history of returning value to shareholders through dividends and share buybacks, with an average payout ratio of 44.4% since 2007 [5] - Analysts have a positive outlook on the company, with a target price increase to 17.7 HKD per share, reflecting confidence in its business model and dividend policy [5] - The stock has shown significant price appreciation, with a 113.43% increase in 2024 and a continued upward trend into 2025, while maintaining an attractive dividend yield of nearly 6% [5]

Financial Performance - Revenue increased by approximately 16.9% year-on-year, reaching approximately RMB 156.17 billion[4] - Gross profit increased by approximately 101.2% year-on-year, amounting to approximately RMB 42.16 billion[4] - Annual profit increased by approximately 96.4% year-on-year, totaling approximately RMB 24.55 billion[4] - Net profit attributable to shareholders increased by approximately 95.2% year-on-year, reaching approximately RMB 22.37 billion[4] - Basic earnings per share increased by approximately 95.2% year-on-year, recorded at approximately RMB 2.3611[4] - The company's revenue for the year was approximately RMB 156.17 billion, an increase of about 16.9% year-on-year[58] - Gross profit reached approximately RMB 42.16 billion, reflecting a year-on-year increase of about 101.2%[58] - Net profit attributable to shareholders was approximately RMB 22.37 billion, up about 95.2% year-on-year[58] - Basic earnings per share were approximately RMB 2.3611, compared to RMB 1.2095 in the same period last year[58] Dividends - Proposed final dividend of HKD 1.02 per share, totaling HKD 1.61 per share for the fiscal year 2024, compared to HKD 0.63 per share for fiscal year 2023[4] - The company declared an interim dividend of HKD 0.59 per share for 2024, compared to HKD 0.12 per share in 2023, reflecting a substantial increase[39] - The board proposed a final dividend of HKD 1.02 per share for the year ending December 31, 2024, which, along with the interim dividend of HKD 0.59, totals HKD 1.61 per share for the fiscal year 2024, compared to HKD 0.63 per share for 2023[115][117] Assets and Liabilities - Cash and cash equivalents increased to approximately RMB 44.77 billion from RMB 31.72 billion year-on-year[10] - Trade receivables increased to approximately RMB 9.77 billion from RMB 5.49 billion year-on-year[10] - Total assets increased to approximately RMB 109.82 billion from RMB 87.39 billion year-on-year[10] - Net assets attributable to shareholders increased to approximately RMB 107.80 billion from RMB 92.24 billion year-on-year[12] - The total liabilities of the group as of December 31, 2024, are approximately RMB 110,551,534,000, compared to RMB 94,063,640,000 as of December 31, 2023, with a debt-to-asset ratio of about 48.2%[89] Trade Receivables and Payables - Trade receivables for 2024 amounted to RMB 9,783,057, up from RMB 5,496,090 in 2023, indicating an increase of about 77.5%[42] - The aging analysis of trade receivables shows that RMB 6,583,327 is within 3 months, compared to RMB 4,883,108 in 2023, reflecting a growth of 34.7%[44] - Trade payables to third parties increased to RMB 11,863,104 in 2024 from RMB 10,764,251 in 2023, marking a rise of approximately 10.2%[45] Capital Expenditure and Investments - The group's capital expenditure for the year was approximately RMB 12.61 billion, mainly for construction projects related to quality assurance, green aluminum innovation, and lightweight materials[80] - As of December 31, 2024, the group's capital commitments related to property, plant, and equipment amount to approximately RMB 7,455,180,000, primarily for the construction of the Yunnan Green Aluminum Innovation Industrial Park, lightweight materials base, and new energy projects[82] - The company plans to acquire 100% equity of Shandong Hongtuo Industrial Co., Ltd., which will increase its stake in Shandong Hongchuang Aluminum Industry Holdings Co., Ltd.[51] Financial Instruments and Standards - The group has adopted new and revised International Financial Reporting Standards (IFRS) effective from January 1, 2024, including IFRS 16 regarding lease liabilities in sale and leaseback transactions[15] - The application of IFRS 1 amendments clarifies the classification of liabilities as current or non-current, which will not significantly impact the group's financial performance for the current and prior years[17] - The group has not early adopted any new IFRS that have been issued but are not yet effective, indicating a cautious approach to upcoming regulatory changes[18] - IFRS 18, which will replace IAS 1 regarding the presentation of financial statements, introduces new requirements for the presentation of specific categories in the income statement and is expected to have minimal impact on the group's financial position[20] Market Performance - Revenue from aluminum products reached RMB 156,168,720 thousand in 2024, up from RMB 133,623,632 thousand in 2023, representing a growth of 16.8%[30] - Revenue from liquid aluminum alloy increased to RMB 95,169,828 thousand in 2024, compared to RMB 83,750,044 thousand in 2023, a rise of 13.5%[30] - The revenue from the Indian market surged to RMB 4,623,728 thousand in 2024, up from RMB 2,412,216 thousand in 2023, indicating an increase of 92.0%[30] Corporate Governance - The board consists of four executive directors, four non-executive directors, and four independent non-executive directors, ensuring a balanced governance structure[103] - The company has received multiple awards for corporate governance and sustainable development, including recognition as one of the "Most Admired Companies"[62] Employee and Operational Metrics - The group has a total of 51,320 employees as of December 31, 2024, an increase of 2,412 from the previous year, with total employee costs amounting to approximately RMB 5,557,824,000, a rise of about 10.4%[93] - The group reported a net cash inflow from operating activities of approximately RMB 33.98 billion for the year[80] Strategic Focus - The company is focusing on green development and has seen a steady increase in low-carbon aluminum production[60] - The company aims to leverage innovation and high-quality development to navigate global market changes and enhance competitiveness[65] - The company continues to focus on high-quality green development as a strategic guideline, aiming to enhance systematic and forward-looking planning for future industries[97] Shareholder Information - As of December 31, 2024, major shareholders include Shih Ping Trust Company holding 6,090,031,073 shares (64.27%) and Zhang Hongxia with 6,098,901,073 shares (64.36%) under a concerted action arrangement[111][116] - The company repurchased a total of 11,649,500 ordinary shares, representing approximately 0.12% of the total issued shares as of December 31, 2024[121] - The repurchase of shares reflects the board's confidence in the company's long-term strategy and growth potential[122]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [8]. Core Views - The company has established itself as a global leader in the aluminum industry chain, effectively hedging against price fluctuations and ensuring long-term operational stability [2][4]. - The company benefits from a flexible management mechanism and leverages the advantages of hydropower resources in Yunnan to transfer part of its electrolytic aluminum capacity, further achieving cost leadership [5][32]. - The company has completed its peak capital expenditure phase, with an average dividend payout ratio of approximately 49.2% from 2019 to H1 2024, and an average dividend yield of 9.2% from 2019 to 2023, which is high within the metal cycle sector [7][32]. - Future aluminum prices are expected to rise, coupled with a tight supply-demand balance, leading to reduced price volatility and enhanced cash profit margins for the company, highlighting its long-term investment value [2][7]. Summary by Sections Company Overview - Founded in July 1994, the company has become a global leader in the aluminum industry chain, with a total alumina production capacity of 19.5 million tons, including 17.5 million tons domestically and 2 million tons in Indonesia [4][17]. - The electrolytic aluminum production capacity is approximately 6.46 million tons, with major production bases in Shandong and Yunnan [4][26]. Operational Strengths - The company has a comprehensive layout of the aluminum industry chain, including bauxite mining, alumina, electrolytic aluminum, and aluminum processing, which effectively mitigates price volatility risks [5][22]. - The company’s return on equity (ROE) is as high as 18.35% (annualized for H1 2024), placing it among the top in the aluminum industry [32]. Profitability and Market Dynamics - The company anticipates a net profit growth of approximately 95% year-on-year in 2024, reaching a historical high, driven by the overall price increase in the aluminum industry chain [4][18]. - The report highlights that the profit share of alumina is expected to dominate in 2024 due to supply constraints, while the profitability of electrolytic aluminum is projected to expand in 2025 as supply dynamics shift [6][53]. Dividend and Valuation - The company’s high dividend payout and the potential acquisition of core aluminum assets are expected to enhance its valuation, with a focus on long-term stable returns for investors [7][56]. - The report notes that the company is likely to benefit from the correction of the A/H share valuation gap following the acquisition of Hongtu Industrial, which has significant alumina and electrolytic aluminum production capacities [7][56].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 16.8, indicating a potential upside of 31% from the current price of HKD 12.82 [2][72]. Core Insights - The company has demonstrated significant revenue growth due to high industry demand, with Shandong Hongqiao achieving a revenue of CNY 110.1 billion in the first three quarters, a year-on-year increase of 12.5%, and a net profit of CNY 15.8 billion, up 141% year-on-year [2][3]. - The integrated business model of the company provides a competitive advantage, ensuring stable supply and cost efficiency, with a self-sufficiency rate of 156% for alumina production [3][72]. - The report forecasts revenue for 2024-2026 to be CNY 150.3 billion, CNY 153.2 billion, and CNY 154.3 billion, respectively, with net profits projected at CNY 20.9 billion, CNY 22.7 billion, and CNY 23.6 billion [72]. Summary by Sections Financial Performance - The company reported a revenue of CNY 133.6 billion in 2023, with a projected increase to CNY 150.3 billion in 2024, reflecting a growth rate of 12% [5][72]. - The net profit for 2023 was CNY 11.5 billion, with expectations of CNY 22.8 billion in 2024, representing an 82% increase [5][72]. - Earnings per share (EPS) are forecasted to be CNY 2.20, CNY 2.40, and CNY 2.50 for 2024, 2025, and 2026, respectively [72]. Industry Context - The aluminum industry is experiencing high demand, with global electrolytic aluminum production growth slowing down, leading to a tight supply situation [24][29]. - The report highlights that China's aluminum production and consumption account for over half of the global totals, with a projected compound annual growth rate of 5.1% in demand from 2015 to 2024 [29][30]. Operational Efficiency - The company has optimized its cost structure, with a decrease in raw material prices contributing to improved profit margins [2][3]. - The report notes a steady decline in the company's debt ratio, which was 47% in 2023, indicating enhanced financial stability [18][20]. Dividend Policy - The company maintains a high dividend payout ratio, with forecasts of dividends per share at HKD 0.80, HKD 1.45, and HKD 1.58 for 2024, 2025, and 2026, respectively [70][72].