Zhongtai Securities Co.,Ltd. released a research report maintaining a "Buy" rating for CHINAHONGQIAO (01378). Considering improved macroeconomic sentiment, the firm raised its aluminum price assumptions for 2025/2026/2027 to RMB 20,500/20,500/21,500 per ton, while maintaining alumina price assumptions at RMB 3,150/3,000/2,800 per ton. The company is expected to achieve net profits of RMB 24.0/24.2/26.9 billion for 2025-27.

On August 15, CHINAHONGQIAO announced that for the first half of 2025, the company achieved operating revenue of RMB 81.039 billion, up 10% year-on-year; net profit attributable to shareholders reached RMB 12.4 billion, up 35% year-on-year. The performance was consistent with earlier guidance, and the company simultaneously announced a new round of buyback plans totaling no less than HK$3 billion.

**Volume and Price Growth Expanding Profit Margins**

In H1 2025, the company's electrolytic aluminum/alumina/aluminum processing products achieved sales volumes of 290.6/636.8/39.2 thousand tons respectively, representing year-on-year growth of 2.4%/15.6%/3.5%. Gross margins for electrolytic aluminum/alumina/aluminum processing products were 25.2%/28.8%/23.3% respectively, increasing by 0.6pct/3.4pct/2.3pct year-on-year. The margin improvement was primarily attributed to rising prices of electrolytic aluminum and alumina.

**Significant Improvement in Associate Company Profits, Continued Cost Optimization**

In the first half, the company's share of profits from associate companies reached RMB 1.8 billion, significantly higher than RMB 0.8 billion in the same period last year, and also exceeding the full-year figure of RMB 1.76 billion from last year. In terms of expenses, the company's overall expenses showed a declining trend in the first half, with financial costs decreasing notably due to continued debt structure optimization.

**Large-Scale High-Frequency Buybacks Demonstrate Confidence**

As of the first half, the company had repurchased and canceled 187 million shares, totaling RMB 2.4 billion. On August 15, the company announced a new round of buyback plans totaling no less than HK$3 billion. In 2025, while the company's stock price continued to break through, the annual buyback amount has reached a historical high, demonstrating the company's confidence in future development.

**Irreversible Expansion of Supply-Demand Gap, Electrolytic Aluminum Moving from Redistribution to Re-expansion**

Domestic electrolytic aluminum supply capacity is approaching its ceiling, while overseas capacity faces "high investment and construction costs, long construction cycles." The "resource-like" attributes of the electrolytic aluminum sector are becoming increasingly prominent, with supply growth at only around 1%. On the demand side, driven by the combined force of pan-new energy, power grid construction, and packaging consumption, electrolytic aluminum demand is expected to effectively reach 2-3%. The supply shortage trend is irreversible, and profit enhancement in the electrolytic aluminum sector will move from redistribution to re-expansion.

**Risk Warning:** Commodity price fluctuations, project construction falling short of expectations, risk of untimely updates to public information used in research reports.