Core Viewpoint - Guotai Junan International maintains a "Buy" rating for China Hongqiao (01378) and raises the target price from HKD 18.00 to HKD 26.10 based on peer valuation multiples and long-term cost advantages from capacity migration [1] Group 1: Financial Performance - China Hongqiao's profit for the first half of 2025 is expected to grow by 35.0% year-on-year, aligning with previous profit forecasts [1] - The profit growth is driven by three factors: rising prices of primary aluminum and alumina improving profit margins, enhanced operational efficiency, and optimized debt structure leading to lower financial costs [1] - The management is confident about future development and has announced a stock repurchase plan of no less than HKD 3 billion, having already invested HKD 2.61 billion in stock buybacks in the first half of 2025 [1] Group 2: Cost Optimization - Capacity migration further drives cost optimization, with the second half of the year typically entering a wet/normal water period in Yunnan, significantly reducing electricity costs [2] - The company plans to migrate 241,000 tons of capacity from Shandong to Yunnan Hongtai, starting operations by the end of March 2025 [2] - By July 2025, Shandong Hongqiao will permanently exit 448,000 tons of capacity, with 69,750 tons moving to Yunnan Hongtai and 160,700 tons to Yunnan Honghe, enhancing cost advantages due to declining coal prices and ongoing capacity transfers [2]
国泰君安国际：维持中国宏桥(01378)“买入”评级 上调目标价至26.1港元