

Core Viewpoint - Huatai Securities maintains a "buy" rating for China Hongqiao (01378) and raises the forecast for net profit attributable to shareholders for 2025-2027 by 34.3%, 17.68%, and 2.95% to CNY 21.659 billion, CNY 20.889 billion, and CNY 21.912 billion respectively, with corresponding EPS of CNY 2.29, CNY 2.20, and CNY 2.31 [1] Group 1: Financial Performance - The company reported a revenue of CNY 81.039 billion for the first half of 2025, an increase of 8.48% year-on-year, and a net profit attributable to shareholders of CNY 12.361 billion, up 35.02% year-on-year, aligning with previous profit forecasts [2] - The gross profit margin for the first half of 2025 was 25.67%, an increase of 1.48 percentage points year-on-year, driven by an average price of electrolytic aluminum at CNY 20,300 per ton, up 2.66% year-on-year [3] Group 2: Cost and Profitability - The decline in electricity costs, influenced by falling coal prices, is expected to enhance profitability, particularly in Shandong where the company has a high proportion of purchased electricity from coal [4] - The company plans to repurchase shares worth no less than HKD 3 billion, reflecting management's confidence in future performance and long-term investment value [4] Group 3: Market Outlook - The company remains optimistic about the upward trend in aluminum prices for the second half of 2025, supported by low inventory levels and strong demand from the photovoltaic and automotive sectors [5] - The outlook for alumina prices is stable, with limited downside potential due to ongoing mining inventory reduction cycles, despite a generally loose supply situation [5]