Core Viewpoint - The report from Everbright Securities maintains a "buy" rating for China Hongqiao (01378) due to its leading position in the aluminum industry and the expected rise in aluminum prices, leading to upward revisions in profit forecasts for 2025-2027 [1] Group 1: Financial Performance - The company reported a revenue of 81.04 billion yuan for the first half of 2025, a year-on-year increase of 10.1%, and a net profit attributable to shareholders of 12.36 billion yuan, reflecting a significant year-on-year growth of 35% [1] - The forecasted net profits for 2025, 2026, and 2027 are 24.73 billion yuan, 26.60 billion yuan, and 28.71 billion yuan respectively, with increases of 5.8%, 5.6%, and 3.4% compared to previous estimates [1] Group 2: Sales and Pricing - The sales volume of aluminum alloy products reached approximately 2.906 million tons in the first half of 2025, a year-on-year increase of 2.4%, while the sales volume of alumina products was 6.368 million tons, up 15.6% year-on-year [2] - The average selling prices for aluminum alloy and alumina products were 17,853 yuan/ton and 3,243 yuan/ton respectively, representing year-on-year increases of 2.7% and 10.3% [2] Group 3: Market Conditions - As of August 25, 2025, the domestic price of electrolytic aluminum was 20,820 yuan/ton, reflecting a 4.7% increase since the beginning of the year [3] - The domestic aluminum consumption is projected to reach 54.35 million tons in 2025, with a year-on-year growth of 1.46%, and a 3.06% increase when excluding export products [3] Group 4: Shareholder Returns - The company plans to repurchase shares totaling no less than 3 billion Hong Kong dollars, demonstrating confidence in its future prospects and long-term value [4] - The company declared a dividend of 1.02 Hong Kong cents per share on June 13, 2025, with a total dividend of 1.61 Hong Kong cents per share for the 2024 fiscal year, compared to 0.63 Hong Kong cents per share in 2023, resulting in a dividend yield of 11% based on the closing price on the ex-dividend date [4] Group 5: Regulatory Environment - The aluminum smelting industry is moving closer to being included in the national carbon market, with guidelines for greenhouse gas emissions reporting and verification being publicly solicited [5] - The carbon emissions from electrolytic aluminum production using thermal power are approximately 13 tons per ton of aluminum, compared to only 1.8 tons when using hydropower, indicating potential cost pressures for thermal power aluminum production [5]