China Hongqiao (01378) rose more than 5%. As of writing, the stock is up 5% to HK$31.1, with a turnover of HK$1.058 billion.
On the news front, alumina futures continued their upward momentum on May 26, with the main 2609 contract surging over 5% to a high of 2,865 yuan per ton. Reports indicate that Guinea, the world's largest bauxite producer, plans to announce reform measures in June to implement export controls on the ore to boost prices. Guinea accounts for over one-third of global bauxite production.
Public information shows that China Hongqiao is a leading integrated primary aluminum producer. Its primary aluminum capacity stands at 6.46 million tons, primarily located in Shandong and Yunnan. Its alumina capacity reaches 21 million tons, making it one of the few domestic companies with an annual alumina capacity exceeding 10 million tons.
Huatai Securities previously noted in a research report that it maintains its forecast for China Hongqiao's net profit attributable to shareholders for 2025-2027 at RMB 25.625 billion, RMB 25.426 billion, and RMB 25.760 billion, respectively. The company's average P/E ratio since 2017 has been 8x. Given its prominent high-dividend characteristics, its scarcity among Hong Kong-listed primary aluminum stocks, and the recent overall increase in market risk appetite, the brokerage maintains a 12x P/E valuation for 2025. Using the HKD to RMB exchange rate of 0.92 as of November 18, it sets a target price of HK$35.22 and reiterates a "Buy" rating.
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