Core Viewpoint - China Hongqiao (01378) has seen its stock price rise over 3%, reaching a new high of 22.62 HKD, driven by a significant increase in expected net profit for the first half of the year [1] Financial Performance - The company anticipates a net profit attributable to shareholders of approximately 12.36 billion HKD for the first half of the year, representing a year-on-year increase of around 35% [1] - The substantial growth in performance is primarily attributed to the rise in aluminum prices compared to the previous year, alongside a decrease in the cost of thermal coal [1] Business Operations - Electrolytic aluminum is the main source of revenue and profit for the company, while alumina is primarily produced for self-use, with some portion sold externally [1]

Group 1 - China Hongqiao (01378) saw its stock price increase over 3%, reaching a new high of 22.62 HKD, with a current trading price of 22.32 HKD and a trading volume of 339 million HKD [1] - The company expects a net profit attributable to shareholders of approximately 12.359 billion RMB for the first half of the year, representing a year-on-year increase of around 35% [1] - The significant growth in the company's performance is primarily attributed to the year-on-year increase in aluminum prices, coupled with a decrease in the cost of thermal coal [1] Group 2 - According to Guolian Minsheng Securities, domestic electrolytic aluminum production capacity is nearing its ceiling, with limited potential for new capacity additions in the future [1] - The demand side is supported by sectors such as the power grid and new energy vehicles, which are expected to show resilience, leading to a gradual emergence of a supply-demand gap in electrolytic aluminum [1] - The China Nonferrous Metals Industry Association announced on July 29 that it will strictly control the new production capacity of alumina, indicating a potential slowdown in the pace of new capacity coming online, which may improve the current overcapacity situation [1]

Core Viewpoint - China Hongqiao Group (01378) has released a positive profit forecast, expecting a net profit increase of approximately 35% in the first half of 2025 compared to the same period last year, driven by rising aluminum product prices and increased sales volumes [1] Group 1: Financial Performance - In the first half of 2024, China Hongqiao's net profit reached 10.008 billion RMB, representing a significant increase of 236.7% compared to the same period in 2023 [1] - Following the profit announcement, the company's stock price opened high and reached a historical peak of 17.28 HKD, reflecting an increase of 8.68% [1] Group 2: Aluminum Price Trends - As of June 20, the LME aluminum spot price was 2,529 USD/ton, up 44 USD/ton week-on-week, and increased by 84 USD/ton year-on-year, indicating a 3.4% rise [2] - The average price of A00 aluminum in the Yangtze River region was 20,700 RMB/ton, which is 280 RMB/ton higher than the same period last year, marking a 1.4% increase [2] - The low inventory levels of electrolytic aluminum, at 3.66 days as of June 20, have provided strong support for aluminum prices [2] Group 3: Supply and Demand Dynamics - The domestic electrolytic aluminum production capacity is nearing its ceiling, leading to a lack of supply elasticity, while demand continues to benefit from the rapid development of the new energy sector, creating a long-term mismatch between supply and demand [5] - The price of alumina has shown volatility due to supply disruptions from Guinea and domestic production cuts, with expectations of continued tight supply [6] Group 4: Cost Management - The decline in energy prices, particularly coal, is expected to positively impact China Hongqiao's cost control. The average coal price at Qinhuangdao Port was 703 RMB/ton in the first five months of this year, down 169 RMB/ton from the average of 872 RMB/ton last year [6] Group 5: Future Growth Prospects - The company is expected to see further profit expansion in the electrolytic aluminum segment due to low inventory levels and favorable cost conditions [7] - The Guinea Simandou iron ore project, in which China Hongqiao has a stake, is set to commence production by the end of this year, potentially contributing significant incremental earnings [7] - Ongoing asset restructuring is anticipated to enhance the company's market influence and investment appeal, with a transaction value of approximately 63.518 billion RMB for acquiring 100% of Hongtu Industrial [7] Group 6: Dividend Policy - China Hongqiao has increased its dividend payouts, with expected distributions of 0.51 HKD, 0.63 HKD, and 1.61 HKD per share for the years 2022-2024, indicating a commitment to returning value to shareholders [8]

Macro Factors - The US-China trade war shows significant signs of easing, with important consensus reached during the Geneva trade talks in early May, establishing a normalized economic consultation mechanism [3] - Recent economic and financial data in China shows marginal improvement, with retail sales growing by 6.4% year-on-year in May, and industrial added value increasing by 5.8% year-on-year, indicating a recovery phase [4] Oil Price Impact - Since early May, international oil prices have rebounded from around $55, influenced by geopolitical factors in the Middle East, reaching new highs not seen since July of the previous year [5] - Historical trends indicate a strong positive correlation between oil prices and aluminum prices, as fluctuations in oil prices affect the energy costs associated with aluminum production [5] Supply and Demand Dynamics - Domestic bauxite production in May reached 5.3664 million tons, with a month-on-month increase of 5.31% and a year-on-year increase of 8.97%, while imports of bauxite hit a historical high [8] - Despite weak overall real estate data, other sectors such as automotive and cable industries are providing incremental demand, with domestic automobile production increasing by 11.3% year-on-year in May [10] - Both domestic and international aluminum inventories are on a downward trend, with domestic social inventory decreasing by nearly 50% since mid-March, indicating a tightening supply situation [10]

Core Viewpoint - Aluminum prices have risen nearly 2% within the day, surpassing $2,500 per ton, marking the highest level since April 1 [1] Group 1 - The increase in aluminum prices indicates a strong market demand and potential bullish trends in the aluminum industry [1]

Core Viewpoint - The price of London aluminum has increased by 2.00%, currently reported at $2468.00 per ton [1] Group 1 - The increase in aluminum price indicates a positive market trend for the aluminum industry [1]