Core Viewpoint - China Aluminum's stock price dropped nearly 5% after the release of its interim results, reflecting market concerns over its financial performance despite a slight increase in revenue and profit [1] Financial Performance - For the first half of the year, China Aluminum reported operating revenue of 116.392 billion yuan, a year-on-year increase of 5.12% [1] - The net profit for the same period was 7.071 billion yuan, showing a year-on-year growth of 0.81% [1] - In the second quarter, the company experienced a decline in operating revenue to 60.61 billion yuan, down 1.9% year-on-year [1] - The net profit attributable to shareholders in the second quarter was 3.53 billion yuan, reflecting a significant year-on-year decrease of 26.2% [1] - The company plans to distribute a cash dividend of 0.123 yuan per share, totaling approximately 2.11 billion yuan, which represents 30% of the net profit attributable to shareholders [1] Market Outlook - Huatai Securities noted that low inventory levels are currently supporting high aluminum prices, and demand in the photovoltaic sector is expected to maintain a high growth rate in the second half of the year despite the end of the policy-driven installation surge [1] - The automotive sector is also anticipated to sustain high growth due to domestic vehicle replacement policies [1] - The overseas economy is expected to gradually recover in the second half of the year amid a rate-cutting cycle [1] - The firm maintains an optimistic outlook for aluminum demand in the second half of 2025, predicting a potential upward trend in aluminum prices [1] - In terms of alumina, the mining sector has entered a destocking phase, making it difficult for bauxite prices to decline, while the alumina segment may face a loose supply situation but is unlikely to see significant price drops due to cost support [1]

Group 1 - Citigroup maintains a "Buy" rating for China Hongqiao (01378) and raises the target price from HKD 21.0 to HKD 25.2, continuing to list it as a preferred stock in the aluminum industry [1] - Concerns among investors regarding aluminum demand in the second half of 2025 are noted, attributed to a slowdown in the solar industry and the arrival of the off-season [1] - Despite a recent decline in actual aluminum consumption, aluminum prices remain strong due to limited new supply, with China's aluminum capacity utilization rate at a high of 98.5% as of June 2025 and low aluminum inventory levels [1] Group 2 - China Hongqiao is expected to benefit from higher aluminum profits, with an attractive dividend yield of 8.1% based on 2025 performance expectations [1] - The aluminum industry is viewed as a top sector by Citigroup, with supply constraints in China expected to keep aluminum profits elevated for an extended period [1] - Strong earnings and substantial dividends are anticipated to lead to a revaluation of China Hongqiao's stock [1]