Core Viewpoint - The company maintains a "Buy" rating and has revised its target price (TP) to HK$26.10, reflecting a positive outlook based on peer valuation multiples and long-term cost advantages from capacity relocation [1] Financial Performance - The company's earnings for 1H2025 grew by 35.0% year-on-year, aligning with previous profit alerts [2] - Profit growth was driven by margin improvements from higher primary aluminum and alumina prices, enhanced operational efficiency with SG&A expenses down by 5.1% year-on-year to RMB2.68 billion, and an optimized debt structure with finance costs reduced by 17.7% year-on-year to RMB1.28 billion [2] Shareholder Actions - Management announced a share buyback plan of no less than HK$3.00 billion, following HK$2.61 billion already spent on share repurchases in 1H2025, indicating strong confidence in future development [2] Cost Optimization - Capacity relocation to Yunnan Province is expected to drive further cost optimization, particularly due to lower power costs during the second half of the year [2] - The company transferred 241,000 tons of capacity from Shandong to Yunnan Hongtai, with operations starting at the end of March 2025, and plans to permanently retire 448,000 tons of capacity in Shandong [2] Market Catalysts - Potential catalysts for growth include rising aluminum prices, increased stimulus policies for downstream aluminum products in China, and the company's asset listing on the A-share market [3]
CHINA HONGQIAO(01378.HK)：STRENGTHENING COST LEADERSHIP MAINTAIN \"BUY\"