China Hongqiao (01378) saw its share price surge more than 4% during the trading session. As of the time of writing, the stock had risen by 2.41% to trade at HK$24.62, with a transaction volume reaching HK$491 million. Persistent supply concerns have driven London Metal Exchange (LME) aluminum prices higher in recent days.
The Alunorte alumina refinery, owned by Norway's Norsk Hydro ASA, has been impacted by a natural gas supply crisis, temporarily reducing its production capacity by half. Norsk Hydro's 2025 annual report indicates that the Alunorte facility is one of the world's largest alumina refineries, with a design capacity of 6.3 million tonnes per year. Additionally, the diminishing prospects for a swift agreement to reopen the Strait of Hormuz have heightened worries that Middle East supply will remain constrained for the foreseeable future.
Soochow Securities believes that China Hongqiao's clear layout of the aluminum industry chain, both domestically and internationally, along with its dividend payout ratio consistently ranking among the top in the aluminum chain, justifies initiating coverage with a "Buy" rating. The brokerage firm noted that the company is steadily advancing its fully integrated aluminum production chain, with coordinated development across upstream, midstream, and downstream operations driving performance growth. In the upstream segment, the company has a globalized supply chain for bauxite and alumina. In the midstream, it operates electrolytic aluminum smelters in Shandong and Yunnan, with an annual production capacity of 6.46 million tonnes. In the downstream segment, the company plans for a recycled aluminum annual capacity of 700,000 tonnes, with 400,000 tonnes currently built.
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