Tianfeng Securities has released a research report adjusting its aluminum price assumptions. The firm now forecasts that CHINAHONGQIAO will achieve net profits attributable to shareholders of 33.1 billion, 35.1 billion, and 37.0 billion yuan for 2026, 2027, and 2028, respectively. This corresponds to a forward price-to-earnings ratio of 10.3x, 9.7x, and 9.2x based on the current share price. Assuming the dividend payout ratio remains at 64%, the projected dividend yield for 2026 is 6.3%. Consequently, Tianfeng Securities maintains its "Buy" rating on the stock. The key points from the report are as follows.
Integrated operations remain stable, with the company rewarding shareholders through both dividends and share buybacks. Regarding annual report performance: In 2025, the company reported revenue of 1.6235 trillion yuan, a year-on-year increase of 4.0%, and a net profit attributable to shareholders of 226.4 billion yuan, up 1.2% year-on-year. For the second half of 2025, revenue was 813.1 billion yuan, essentially flat compared to the first half, while net profit attributable to shareholders was 102.8 billion yuan, remaining largely unchanged year-on-year.
In the primary aluminum segment, sales volume was flat, but price increases boosted profits. In 2025, the company's sales volume of aluminum alloy products was 5.824 million tons, and sales of deep-processed products were 716,000 tons, both largely unchanged from the previous year. The average selling price for aluminum alloy products was 18,216 yuan per ton (excluding VAT), an increase of 3.8% year-on-year. The unit cost was 13,034 yuan per ton, down 1.5% year-on-year, resulting in a unit gross profit of 5,183 yuan per ton, a significant increase of 20.1% year-on-year. The average selling price for deep-processed aluminum products was 20,874 yuan per ton (excluding VAT), up 3.1% year-on-year. While sales volumes for both aluminum alloy and deep-processed products were stable, the gross profit contribution from aluminum alloy products increased by 4.99 billion yuan to 30.2 billion yuan, benefiting from higher aluminum prices. Conversely, gross profit from processed products decreased by 860 million yuan to 2.87 billion yuan due to rising costs.
Various expense items remained relatively stable, although convertible bonds had a negative impact on reported profits. Expenses such as administrative and financial costs remained largely steady in 2025. The company recognized a fair value loss on financial instruments of 3.78 billion yuan, an increase of 1.59 billion yuan from the previous year, primarily due to accounting provisions for the equity component of convertible bonds following share price increases (this is an accounting entry with no cash outflow). An inventory impairment of 720 million yuan was also recorded, up 460 million yuan year-on-year. Excluding these non-operational impacts, the company's underlying profit level is stronger.
The company continues its high dividend policy, rewarding shareholders through a dual approach of dividends and share repurchases. At the end of 2025, the company distributed a dividend of HKD 1.65 per share, totaling approximately 14.4 billion yuan in dividend payouts, representing a payout ratio of 64%. Furthermore, throughout 2025, the company repurchased shares worth HKD 5.58 billion, equivalent to approximately 4.9 billion yuan, demonstrating its commitment to returning value to shareholders through both channels.
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