Group 1: Company Overview - China Hongqiao (01378) is a leading integrated electrolytic aluminum producer with significant advantages in resource layout and high self-sufficiency in alumina and electricity [1] - The company has a prominent cost advantage due to the low price of thermal coal and a decreasing dependence on imported bauxite [1] Group 2: Financial Performance - The company expects a 35% year-on-year increase in net profit for the first half of 2025, projecting approximately 135.1 billion RMB compared to 100.1 billion RMB in the first half of 2024 [2] - The increase in profit is attributed to higher sales prices and volumes of alloy and alumina products, along with reduced electricity costs due to falling thermal coal prices [2] Group 3: Cost Structure - As of June 24, 2025, the average price of thermal coal has decreased by 22% year-on-year, leading to a reduction in self-generated electricity costs and electrolytic aluminum production costs [3] - The company's self-generated electricity rate is 46%, and the ongoing decline in coal prices is expected to further enhance its cost advantages [3] Group 4: Dividend Policy - The company declared a final dividend of 0.102 HKD per share for 2024, with a total annual dividend of 0.161 HKD per share, resulting in a dividend payout ratio of approximately 63% and a dividend yield of about 11% [4] - The company has consistently paid dividends since its listing in 2011, with a stable payout ratio above 47% over the past five years, indicating strong long-term investment value [4] Group 5: Market Dynamics - Domestic electrolytic aluminum production capacity is nearing its limit, while overseas supply growth is slow, leading to a constrained supply outlook [5] - Demand from the electric vehicle and power sectors is expected to offset the decline in real estate demand, resulting in a favorable long-term supply-demand balance for electrolytic aluminum [5]