Investment Rating - The report maintains a "Recommended" rating for China Hongqiao (01378.HK) [1][3]. Core Views - The report highlights that the increase in alumina prices has significantly enhanced the profitability of the alumina segment, with a notable increase in both revenue and net profit for the third quarter of 2024 [1]. - The company has a well-integrated industrial chain, with substantial production capacities in electrolytic aluminum and alumina, which strengthens its raw material security [1]. - The report anticipates that the transition to green energy will support long-term development and potentially enhance the company's valuation [1]. Summary by Sections Financial Performance - In Q1-3 2024, Shandong Hongqiao achieved revenue of 1100.68 billion RMB, a year-on-year increase of 12.47%, and a net profit of 157.54 billion RMB, up 141.43% year-on-year [1]. - For Q3 2024, revenue was 380.23 billion RMB, reflecting a 13.86% year-on-year growth and a 1.99% quarter-on-quarter increase, while net profit reached 59.61 billion RMB, up 38.01% year-on-year and 9.35% quarter-on-quarter [1]. Production and Pricing Insights - The report notes that in Q3 2024, electrolytic aluminum production in Shandong is expected to reach full capacity of 1.243 million tons, with alumina production also running at full capacity [1]. - The market price for alumina in Shandong increased by 290 RMB/ton, while the price for electrolytic aluminum decreased by 975 RMB/ton [1]. Future Outlook - The company is expected to achieve net profits of 177.96 billion RMB, 200.65 billion RMB, and 219.85 billion RMB for the years 2024, 2025, and 2026, respectively, with corresponding P/E ratios of 6, 5, and 5 [1][2]. - The report emphasizes the importance of the company's integrated layout in alumina, bauxite, and electrolytic aluminum, which enhances its operational efficiency and profitability [1].
中国宏桥：氧化铝利润增厚，一体化布局优势显现