Movement Alert｜China Hongqiao Falls 3.08% in Regular Trading, Aluminum Sector Under Pressure After Goldman Sachs Downgrade and Convertible Bond Dilution Concerns

On June 23, China Hongqiao fell 3.08% in regular trading, trading at 22.04 HKD/share, with turnover of 8.94 billion HKD.

On the news front, the aluminum sector continued its broad-based weakness following Goldman Sachs's downgrade of Chalco from neutral to sell, with target price slashed from 12.5 HKD to 7.5 HKD and expectations that aluminum prices will continue to decline. Industry peers Chalco fell 5.71%, Chuangxin Industrial fell 5.38%, and Nanshan Aluminium International fell 4.82%, indicating significant sector-wide selling pressure.

Additionally, the company's previously announced convertible bond conversion price adjustment from 19.36 HKD to 18.44 HKD per share, with a maximum of 126 million new shares issuable upon full conversion, continues to weigh on sentiment due to equity dilution concerns. The completion of the company's 30.79 billion HKD share buyback program has also removed a key source of sustained buying support.

Notably, Citi maintained its buy rating with a 48 HKD target price, arguing the selloff is overdone and supply concerns are exaggerated, while CMBI noted the stock trades at an attractive 5.6x forward P/E with approximately 11% dividend yield.

(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)