Core Viewpoint - China Hongqiao (01378) maintains a "buy" rating with a significant price increase of 124.49% from the beginning of 2025 to August 22, 2025, ranking among the top ten performers in the non-ferrous metal sector [1] Group 1: Company Performance - Since the low point in March 2020, China Hongqiao has achieved a cumulative increase of 1316.85% as of August 22, 2025, showcasing a remarkable recovery in the metal sector [1] - The company's net profit attributable to shareholders increased by 35.02% year-on-year in the first half of the year, benefiting from lower coal prices and a low base from last year's impairment profits [1][2] - The average dividend yield from 2020 to 2024 is 10.48%, with a projected yield of 13.69% for 2024, indicating a strong dividend profile and attractive value for dividend investors [1] Group 2: High Dividend Status - China Hongqiao is recognized as the first high-dividend player in the electrolytic aluminum sector due to its leading cost management and cash flow generation, with net cash flow from operating activities increasing from 17.779 billion to 33.983 billion from 2020 to 2024 [2] - The company has a fully integrated aluminum industry chain, which helps mitigate price fluctuations across different products, ensuring stable operational performance [2] - Capital expenditure has been kept low, with only about 38% of operating cash flow allocated to capital expenditures, allowing for further downward flexibility in future spending [2] Group 3: Future Outlook - The electrolytic aluminum sector is expected to experience a dual boost in profitability and valuation, driven by a favorable economic cycle and increasing dividend yields [3] - With long-term interest rates declining and the average dividend yield in the electrolytic aluminum sector exceeding 5%, there is potential for further growth in dividend yields as aluminum prices and dividends rise [3] - China Hongqiao is positioned to lead the recovery in profitability and valuation within the sector, with a projected annualized net profit of 24.72 billion based on the first half of the year, corresponding to a dividend yield of 7.09% [3]

Core Viewpoint - China Hongqiao (01378) has maintained a "buy" rating from Changjiang Securities, with a remarkable increase of 124.49% from the beginning of 2025 to August 22, 2025, ranking among the top ten in the non-ferrous sector for annual growth [1] Group 1: Company Performance - Since the low point in March 2020, China Hongqiao has achieved a cumulative increase of 1316.85% as of August 22, 2025, emerging strongly from the metal sector [1] - The company's net profit attributable to shareholders increased by 35.02% year-on-year in the first half of the year, benefiting from a decline in coal prices and a low base from last year's impairment profits [1] - The average dividend yield from 2020 to 2024 is 10.48%, with a projected dividend yield of 13.69% for 2024, indicating a strong dividend attribute and improved cost-effectiveness for dividend allocation [1] Group 2: High Dividend Status - China Hongqiao is recognized as the first high-dividend electrolytic aluminum enterprise due to its leading position in raw materials, energy, and management costs, with operating cash flow increasing from 17.779 billion to 33.983 billion from 2020 to 2024 [2] - The company has a global integrated aluminum industry chain, effectively hedging against price fluctuations in different products, ensuring stable operating performance [2] - Capital expenditure has decreased, with capital expenditure to operating cash flow net ratio at approximately 38%, indicating potential for further downward adjustment [2] Group 3: Future Outlook - The electrolytic aluminum sector is expected to experience a dual boost in profitability and valuation, with the cycle transitioning through phases of interest rate changes, which may support economic recovery [3] - The average dividend yield of over 5% positions the electrolytic aluminum sector among the top dividend sectors in the market, with further growth potential as aluminum prices and dividends increase [3] - China Hongqiao is anticipated to lead the wave of profit and valuation recovery, with a projected annualized net profit of 24.72 billion based on the first half of the year, corresponding to a dividend yield of 7.09% [3]

Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Views - The report highlights that the electrolytic aluminum sector is expected to experience a dual boost in profitability and valuation, with China Hongqiao as a leading integrated player driving this trend [5][7] - The company has shown remarkable performance, with a cumulative increase of 1316.85% since the low point in March 2020, and a year-to-date increase of 124.49% as of August 22, 2025 [5] - The company's net profit attributable to shareholders for the first half of the year increased by 35.02% year-on-year, benefiting from lower coal prices and a low base from last year's impairment profits [5][6] - The average dividend yield from 2020 to 2024 is projected to be 10.48%, with a high of 13.69% in 2024, showcasing the company's strong dividend attributes [6][7] Summary by Sections Company Performance - The company has a robust cash flow, with net cash flow from operating activities increasing from 17.779 billion to 33.983 billion from 2020 to 2024 [6] - The integrated supply chain from bauxite to aluminum processing helps mitigate price fluctuations across different products [6] Future Outlook - The report suggests that the electrolytic aluminum sector is entering a phase of profitability and valuation recovery, with potential for further growth in dividend yields as aluminum prices rise [7] - The anticipated annualized net profit for the first half of the year is projected at 24.72 billion, with a reference dividend payout ratio of 62.03%, leading to a dividend yield of 7.09% [7]