CICC has released a research report maintaining an "Outperform" rating on China Hongqiao (01378), noting that its first-half 2026 results aligned with market expectations. The company reported H1 2026 revenue of RMB 87.506 billion, a year-on-year increase of 7.98%; pre-tax profit of RMB 25.154 billion, up 41.6% year-on-year; and net profit of RMB 17.210 billion, representing a 39.23% increase. Additionally, the substantial share buybacks and stake increases during H1 2026 underscore the company's confidence in its long-term growth prospects.
Rising aluminum prices boost per-ton profit significantly
From a pricing perspective, the average prices for electrolytic aluminum and alumina in H1 2026 were RMB 24,100 per ton and RMB 2,704 per ton, respectively. In terms of sales volume, aluminum alloy product sales reached 2.811 million tons during the period, while alumina sales totaled 6.917 million tons, up 8.6% year-on-year. On the profitability front, the unit gross profit for aluminum alloy products stood at RMB 8,161 per ton, a substantial 81.1% increase compared to the same period last year.
Balance sheet further strengthened; buybacks and stake increases signal long-term confidence
The company's debt-to-asset ratio declined to 40.5% in H1 2026, down 1.7 percentage points from the end of 2025. Benefiting from a reduction in interest-bearing debt and lower financing rates, financial expenses decreased by 13.6% year-on-year. During H1 2026, the company repurchased a total of 159 million shares for HK$5.286 billion, which were subsequently cancelled. In June, the controlling shareholder increased its stake by 41.5 million shares, investing HK$1.1 billion.
An aluminum industry leader building an integrated green industrial chain
At the upstream stage, the company continues to strengthen its resource reserves by developing a bauxite supply base in Guinea through its Winning Consortium joint venture, ensuring raw material security. It has also expanded into alumina smelting and participated in iron ore development, aligning with local industrial policies and mitigating geopolitical risks. In the midstream segment, the company is advancing its green transformation strategy by implementing the "North Aluminum, South Migration" plan, relocating some Shandong production capacity to Yunnan, which is rich in hydropower resources. Simultaneously, it is exploring carbon reduction pathways in Shandong through green power direct supply combined with molten salt energy storage, pioneering an electricity-heat-steam conversion model. At the downstream level, the company continues to optimize its product structure by expanding into the automotive lightweighting business and building a comprehensive green recycling industry matrix.
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