Core Viewpoint - First Shanghai has given a "buy" rating for China Hongqiao (01378), predicting revenue and net profit growth from 2025 to 2027, with a target price of HKD 29.0, indicating a 24% upside potential from the current price [1] Group 1: Financial Performance - In the first half of 2025, the company achieved operating revenue of CNY 81.039 billion, a year-on-year increase of 10.1%; gross profit reached CNY 20.805 billion, a significant increase of 16.9%, with a gross margin improvement of 1.5 percentage points to 25.7% [1] - The net profit attributable to shareholders was CNY 12.361 billion, reflecting a strong year-on-year growth of 35.0%, with a net profit margin increase of 3.1 percentage points to 16.7% [1] - Basic earnings per share surged by 36.0% to CNY 1.31 [1] Group 2: Cost Advantages and Operational Efficiency - The company benefits from stable upstream bauxite supply, with 75.3% sourced from Guinea, ensuring raw material cost advantages [2] - Midstream, the electrolytic aluminum sales reached 2.906 million tons, with a gross margin increase of 0.6 percentage points to 25.2%, driven by optimized energy structure, low-carbon technology reducing energy consumption, and digital empowerment [2] - Downstream, aluminum alloy processing sales were 392,000 tons, with revenue growth of 6.5% to CNY 8.074 billion, achieving bulk delivery of high value-added products [2] Group 3: Market Dynamics - In the first half of 2025, the global electrolytic aluminum market showed a tight balance between supply and demand, with China's primary aluminum production accounting for approximately 59.7% of global output and consumption at 62.6%, reflecting year-on-year increases of 0.2% and 1.1% respectively [3] - Growth in sectors such as power grids, photovoltaics, and new energy vehicles has significantly contributed to domestic demand [3] - It is expected that electrolytic aluminum prices will remain in the range of CNY 20,600 to 21,300 per ton, while alumina prices will be between CNY 3,200 and 3,300, indicating an overall trend of rising prices due to supply-demand dynamics [3] Group 4: Shareholder Returns - The company emphasizes shareholder returns, having repurchased 1.87 billion shares for HKD 2.61 billion in the first half of the year, which directly enhances earnings per share [4] - The company has committed to maintaining the dividend payout ratio at the 2024 level for 2025 and announced a new repurchase plan of no less than HKD 3 billion, demonstrating management's confidence in the company's future development [4]
第一上海：予中国宏桥(01378)“买入”评级 目标价29.0港元