Core Viewpoint - Nanshan Aluminium International Holdings reported strong interim results for 1H25, with significant revenue and profit growth driven by rising alumina sales prices and volumes [1][2]. Financial Performance - Revenue increased by 41.0% year-on-year to approximately US$597 million, while profit attributable to shareholders surged by 124.2% year-on-year to around US$248 million, slightly exceeding expectations due to higher-than-expected sales prices [1]. - Gross profit rose by 70.1% year-on-year, with gross margin improving by 8.7 percentage points to 50.9% [2]. - The selling price of alumina increased by 36.9% year-on-year to US$529 per ton, while operating costs rose by 16.3% year-on-year to US$260 per ton [1]. Tax and Dividend - The company will face an increase in corporate income tax to 15% effective January 1, 2025, due to compliance with the Global Anti-Base Erosion Rules [2]. - An interim dividend was declared for the first time since the IPO, with a payout ratio of approximately 20% to reward shareholders [2]. Production Capacity and Expansion - Nanshan Aluminium is a leading alumina producer in Southeast Asia, with ongoing project construction progressing faster than expected [3]. - The company has built alumina production capacity of 3 million tons per year, with Phase II of a new project expected to start production in Q4 2025 or Q1 2026 [3]. Competitive Advantages - Cost advantages stem from Indonesia's abundant bauxite and coal resources, along with an expanding deep-water port to enhance logistics efficiency [5]. - Regional advantages include tax incentives for up to 20 years in the Galang Batang KEK, allowing alumina products to be utilized throughout Southeast Asia [5]. - Shareholder advantages arise from strong industrial synergies among the major shareholders in midstream alumina production, downstream consumption, and upstream bauxite supply [5]. Financial Forecasts and Valuation - Net profit forecasts for 2025 and 2026 have been raised by 7% and 9% to US$374 million and US$500 million, respectively [5]. - A-shares are trading at 9x and 6x estimated P/E for 2025 and 2026 [5]. - The target price has been raised by 58% to HK$52.59, reflecting a 25% upside based on upward earnings revisions and improving market risk appetite [5].
NANSHAN ALUMINIUM INTERNATIONAL HOLDINGS(02610.HK)：ACCELERATED CAPACITY CONSTRUCTION BOOSTED PROFIT; FIRST INTERIM DIVIDEND TO REWARD SHAREHOLDERS