Core Viewpoint - DBS Bank maintains a "Buy" rating for China Hongqiao (01378) and significantly raises the 12-month target price from HKD 29 to HKD 45 based on strong profitability, a solid balance sheet, and high dividend yield expectations [1] Group 1: Company Performance - China Hongqiao holds a global aluminum production capacity that accounts for 14% of China's and 8% of the world's total, establishing a complete integrated supply chain from bauxite mining in Guinea to alumina production in Indonesia and electrolytic aluminum in China [1] - The company has relocated part of its production capacity to Yunnan, leveraging hydropower to reduce production costs and meet clean energy requirements, ensuring raw material supply despite potential tightening of bauxite mining rights in Guinea [1] - The management expects the average aluminum price to reach CNY 23,000 per ton in 2026, an 11% year-on-year increase, while alumina prices are projected to decline by 19% to CNY 27,000-28,000 per ton [1] Group 2: Financial Health - China Hongqiao's cash flow and debt structure continue to improve, with cash holdings of CNY 51 billion, a 14.3% year-on-year increase, and a debt-to-asset ratio that has decreased by 6 percentage points to 42.2% [2] - The company commits to a long-term dividend payout ratio of 65% and reserves funds for share buybacks, resulting in a dividend yield of approximately 6%, which is expected to enhance long-term shareholder confidence [2]
星展：全产业链优势支撑盈利高增 上调中国宏桥(01378)目标价至45港元