Group 1 - HSBC raised the target price for China Hongqiao (01378) from HKD 18.5 to HKD 20.6, maintaining a "Buy" rating due to strong earnings performance in the first half of 2025 driven by rising aluminum prices and reduced costs [1] - The aluminum sector started strong in the first half of 2025, benefiting from robust demand, favorable pricing, and cost dynamics, with aluminum prices increasing by approximately 3% year-on-year and unit costs declining due to a 20% drop in coal prices [1] - Despite signs of demand slowing in the second half of the year, the overall fundamentals for aluminum remain supportive, with downstream industries showing signs of deceleration that may pressure aluminum demand and prices [1] Group 2 - The industry benefits from multiple favorable factors, including a production cap of 45 million tons, ongoing investments in the power grid, electric vehicle sales, and a recovery in exports supporting demand [2] - The "trade-in" subsidies continue to play a role, although their incremental impact may begin to wane, and aluminum prices are expected to be supported by low inventory levels [2] - Further increases in prices and profits may require strong demand and continued declines in energy costs, while broader "anti-involution" policies may reinforce aluminum production caps, helping to maintain market discipline [2]
汇丰：中国宏桥(01378)长期前景乐观 上调目标价至20.6港元