Core Insights - The company reported a revenue of 20.428 billion yuan for the first half of 2025, representing a year-on-year increase of 12.1%, while the net profit attributable to shareholders was 1.904 billion yuan, down 16.6% year-on-year [1] - In Q2 2025, the company achieved a revenue of 10.797 billion yuan, up 8% year-on-year and 12.1% quarter-on-quarter, with a net profit of 1.196 billion yuan, which is a slight increase of 0.2% year-on-year and a significant increase of 68.9% quarter-on-quarter [1] Revenue and Profit Analysis - The company’s aluminum production and sales volume for the first half of 2025 reached 871,100 tons and 871,400 tons, respectively, both up 16.2% and 16.3% year-on-year, achieving over 51% of the annual plan [2] - The comprehensive selling price of aluminum was 16,269 yuan per ton, up 4.2% year-on-year, while the sales cost was 12,284 yuan per ton, up 6.4% year-on-year, leading to a gross profit of 3,986 yuan per ton, down 1.8% year-on-year [2] - The coal production and sales volume for the first half of 2025 were 3.7078 million tons and 3.7275 million tons, respectively, up 14.9% and 18.3% year-on-year [2] - The comprehensive selling price of coal was 773 yuan per ton, down 30.6% year-on-year, with a gross profit of 91 yuan per ton, down 72.2% year-on-year [2] Regional Performance - The net profit from the Xinjiang coal power and Yunnan Shenhuo regions was 1.235 billion yuan and 983 million yuan, respectively, with year-on-year increases of 3.2% and 79.1%, indicating significant profit growth in the Yunnan region due to increased production capacity [2] Investment Income and Expenses - Investment income for the first half of 2025 was 332 million yuan, up 116.2% year-on-year, with 240 million yuan coming from joint ventures and associates, an increase of 168 million yuan [3] - Operating expenses rose to 186 million yuan, up 48.8% year-on-year, primarily due to losses from a subsidiary's settlement and fines incurred during the period [3] Future Outlook - The company adjusted its aluminum and coal price assumptions, projecting net profits attributable to shareholders of 5.16 billion yuan, 5.71 billion yuan, and 6.37 billion yuan for 2025, 2026, and 2027, respectively [3] - With improving macroeconomic sentiment and seasonal expectations, aluminum prices are expected to rise, and coal segment profitability may recover in the second half of the year [3]

Core Viewpoint - Huatai Securities maintains a "buy" rating for China Hongqiao (01378) and raises the forecast for net profit attributable to shareholders for 2025-2027 by 34.3%, 17.68%, and 2.95% to CNY 21.659 billion, CNY 20.889 billion, and CNY 21.912 billion respectively, with corresponding EPS of CNY 2.29, CNY 2.20, and CNY 2.31 [1] Group 1: Financial Performance - The company reported a revenue of CNY 81.039 billion for the first half of 2025, an increase of 8.48% year-on-year, and a net profit attributable to shareholders of CNY 12.361 billion, up 35.02% year-on-year, aligning with previous profit forecasts [2] - The gross profit margin for the first half of 2025 was 25.67%, an increase of 1.48 percentage points year-on-year, driven by an average price of electrolytic aluminum at CNY 20,300 per ton, up 2.66% year-on-year [3] Group 2: Cost and Profitability - The decline in electricity costs, influenced by falling coal prices, is expected to enhance profitability, particularly in Shandong where the company has a high proportion of purchased electricity from coal [4] - The company plans to repurchase shares worth no less than HKD 3 billion, reflecting management's confidence in future performance and long-term investment value [4] Group 3: Market Outlook - The company remains optimistic about the upward trend in aluminum prices for the second half of 2025, supported by low inventory levels and strong demand from the photovoltaic and automotive sectors [5] - The outlook for alumina prices is stable, with limited downside potential due to ongoing mining inventory reduction cycles, despite a generally loose supply situation [5]

Group 1 - China Hongqiao (01378) saw its stock price rise over 3%, reaching a new high of 22.62 HKD, with a current price of 22.32 HKD and a trading volume of 339 million HKD [1] - The company issued a profit warning, expecting a net profit attributable to shareholders of approximately 12.359 billion CNY for the first half of the year, representing a year-on-year increase of about 35% [1] - The significant growth in 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 - Electrolytic aluminum is the main source of revenue and profit for the company, while alumina is mainly produced for self-use, with some external sales [1] - Guotai Junan Securities reported that domestic electrolytic aluminum production capacity is nearing its ceiling, with limited future capacity additions expected; demand from the power grid and new energy vehicles is expected to support resilience in demand [1] - The China Nonferrous Metals Industry Association indicated on July 29 that it will strictly control the addition of new alumina production capacity, suggesting that the pace of new capacity coming online may slow down, improving the oversupply situation in the medium to long term [1]