Investment Rating - The report maintains a "Buy" rating for China Hongqiao (01378.HK) based on the expected increase in aluminum prices and significant cost reductions enhancing earnings elasticity [1]. Core Views - The company reported a revenue of 73.59 billion yuan for H1 2024, a year-on-year increase of 12%, and a net profit of 10.01 billion yuan, up 236.7% year-on-year, exceeding the previous profit forecast [1]. - The strong performance is attributed to rising prices of electrolytic aluminum and alumina, alongside a robust production capacity recovery in Yunnan [1]. - The company has a well-integrated industrial chain, with a total electrolytic aluminum capacity of 6.459 million tons and alumina capacity of 19.5 million tons, ensuring strong raw material supply [1]. - Future growth is supported by the transition to green energy, with a focus on hydropower in Yunnan, which is expected to enhance long-term development [1]. Summary by Sections Financial Performance - In H1 2024, the company produced 3.221 million tons of electrolytic aluminum, a 5.3% increase year-on-year, with alumina sales reaching 5.507 million tons, up 2.4% year-on-year [1]. - The average profit per ton for alumina in Q2 was 875 yuan, reflecting improved profitability in the sector [1]. - The mid-term dividend for H1 2024 is set at 0.59 HKD per share, totaling approximately 5.59 billion HKD, with a payout ratio of about 56% [1]. Future Outlook - The report highlights several future growth drivers, including the completion of the industrial chain integration, cost advantages from declining coal prices, and the strategic shift of electrolytic aluminum capacity to Yunnan [1]. - The company is also expanding its resource base by participating in a Guinea iron ore project, which is expected to provide additional returns [1]. - Forecasted net profits for 2024-2026 are 17.796 billion yuan, 20.065 billion yuan, and 21.985 billion yuan, respectively, with corresponding PE ratios of 5, 4, and 4 times [1].
中国宏桥：2024年半年业绩点评：电解铝+氧化铝盈利提升，一体化布局优势显现