20 Mar 2026 CMB International Global Markets | Equity Research | Company Update Chuangxin Industries (2788 HK) Chuangxin Industries (2788 HK) Chuangxin hosted a post-results analyst meeting yesterday (19 Mar). Questions were mostly around the progress of aluminium capacity construction in Saudi Arabia as well as the acquisition of coal mine through connected transaction. Key takeaways: (1) Saudi project is in good progress with no disruption so far; (2) the all-in production cost in Saudi is expected to be ...

18 Mar 2026 CMB International Global Markets | Equity Research | Company Update Chuangxin Industries (2788 HK) Chuangxin Industries (2788 HK) 2025 profit +33% YoY; surprising dividend Chuangxin's net profit in 2025 grew 33% YoY to RMB2.73bn, which is 5% above our expectations but 2% below Bloomberg consensus. Chuangxin proposed a final dividend of HK$0.77/shr, equivalent to ~54% payout, which is higher than our expectation. Meanwhile, Chuangxin announced two connected transactions, including (1) the acquisi ...

Investment Rating - The report initiates coverage of Chuangxin Industries with a BUY rating and a target price (TP) of HK$32, representing a 28% upside from the current price of HK$25 [3][8]. Core Insights - Chuangxin Industries presents a unique growth opportunity in the aluminium sector, driven by capacity expansion in Saudi Arabia and a significant cost advantage due to low green energy costs in China [1]. - The ongoing development of wind and solar power sources is expected to further reduce electricity costs by 2026-2027, enhancing profitability [1]. - The tight supply in the aluminium market is anticipated to support higher aluminium prices, with a 1% increase in aluminium prices projected to boost Chuangxin's earnings by 2.5% in 2026 [1]. Financial Summary - Revenue is projected to grow from RMB 13,815 million in FY23A to RMB 20,091 million in FY27E, with a notable increase of 29.1% in FY26E [2]. - Adjusted net profit is expected to rise significantly from RMB 1,003.6 million in FY23A to RMB 4,819.4 million in FY27E, reflecting strong growth potential [2]. - The earnings per share (EPS) is forecasted to increase from RMB 0.67 in FY23A to RMB 2.32 in FY27E, indicating robust profitability growth [2]. Capacity Expansion - Chuangxin currently operates 788 kt of electrolytic aluminium capacity in China and is expanding with a 500 kt project in Saudi Arabia, expected to be completed by Q2 2027 [7][14][16]. - The company has a high self-sufficiency rate for electricity, with plans to achieve over 50% of its power supply from green energy by 2027, significantly reducing costs [25][34][37]. Cost Structure - The current electricity cost for Chuangxin is RMB 0.33/kWh, lower than the industry average of RMB 0.40/kWh, with expectations to reduce this further to below RMB 0.20/kWh through green energy initiatives [25][37]. - The company’s captive coal-fired power plants provide 100% electricity self-sufficiency for aluminium smelting, enhancing its cost leadership in the sector [24][25]. Market Position - Chuangxin is positioned as a significant player in the aluminium market, being the 12th largest electrolytic aluminium producer in China as of 2024 [7]. - The company has established a strong customer base, with a significant portion of its revenue derived from major clients in the non-ferrous metal processing sector [39][41].