Core Viewpoint - The global aluminum supply shortage is expected to persist until 2026-2027, leading to an upward adjustment in the profit forecast for China Hongqiao (01378) and an increase in the target price from HKD 39 to HKD 45, maintaining a "Buy" rating [1][2] Group 1: Industry Insights - The current utilization rate of China's primary aluminum production capacity is nearing the policy limit of 99%, while new overseas production capacity is limited, supporting a sustained global aluminum market shortage [1] - The average aluminum price is projected to increase by 15% year-on-year in 2026, with price forecasts for 2026 and 2027 being raised by 12% and 7%, respectively [1] - Despite an anticipated acceleration in overseas production capacity in 2027, the aluminum shortage is expected to continue, keeping prices at high levels [1] Group 2: Company Performance - China Hongqiao's core net profit for 2025 is expected to reach CNY 26.262 billion, a year-on-year increase of 7%, with a projected profit growth rate of 34% in 2026 driven primarily by rising aluminum prices [1] - The sensitivity analysis indicates that a 1% increase in aluminum prices will enhance the company's net profit by 2.3% in 2026, while a 1% decrease in coal prices will boost net profit by 0.3% [1] Group 3: Valuation - Based on a forward P/E ratio of 11 times for 2026, the target price for China Hongqiao has been raised to HKD 45, with future stock price increases expected to rely more on profit growth rather than valuation expansion [2]
招银国际：铝价看涨+成本下降双重利好催化 上调中国宏桥(01378)目标价至45港元