GF Securities: China Hongqiao's core business remains stable with continued high dividends

MaticHoleFiller · 2026-03-26T17:23:28+00:00

Guangfa Securities research report indicates that the rise in aluminum prices will boost China Hongqiao's profits from 2026 to 2028. The expected EPS is 3.31-3.36 HKD per share. Applying a 12x PE for 2026, the fair value is estimated at 45.15 HKD per share, maintaining a "Buy" rating. The company's 2025 performance met expectations, with a slight increase in net profit attributable to shareholders and continued high dividend policy. Risks include demand decline and rising costs.

MaticHoleFiller

2026-03-26 17:23:28

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GF Securities released a research report stating that rising aluminum prices have increased the profit of China Hongqiao (01378). It is expected that China Hongqiao’s EPS for 2026-2028 will be 3.31/3.34/3.36 HKD per share. Based on comparable company valuations, a 12x PE ratio is applied for 2026, giving a fair value of HKD 45.15 per share, maintaining a “Buy” rating.

GF Securities’ main points are as follows:

The company’s net profit attributable to shareholders in 2025 slightly increased year-on-year, meeting expectations

China Hongqiao announced its 2025 performance report, with operating revenue of 162.4 billion RMB, up 4.0% year-on-year, and net profit attributable to shareholders of 22.6 billion RMB, up 1.2%. The profit from associates was 2.63 billion RMB, a 50% increase. Decreased impairment of fixed assets led to a 58% reduction in other expenses to 1.22 billion RMB. As of the end of 2025, the company’s asset-liability ratio decreased by 6.0 percentage points to 42.2%.

In 2025, the company’s sales of electrolytic aluminum products remained stable, and rising aluminum prices increased gross profit year-on-year

China Hongqiao announced its 2025 performance report, with sales of aluminum alloy, alumina, and deep-processed aluminum products at 5.82 million, 13.4 million, and 720,000 tons respectively, representing a decrease of 0.2%, an increase of 54%, and a decrease of 3% year-on-year. The unit prices for aluminum alloy and alumina were 18,217 RMB/ton and 2,899 RMB/ton, up 4% and down 15%. The unit costs were 13,034 RMB/ton and 2,256 RMB/ton, down 1% and 18%. The gross profit per ton was 5,183 RMB and 643 RMB, up 20% and down 1% respectively.

In 2025, the company continued its high dividend policy

China Hongqiao announced its 2025 performance report, proposing a year-end cash dividend of HKD 1.65 per share, up 2.5%. Based on the latest share capital, the cash dividend payout ratio reached 64%.

Risk warnings:

Lower-than-expected downstream demand. Overseas electrolytic aluminum production exceeded expectations. Costs of bauxite, anodes, and electricity rose faster than expected. Recycled aluminum supply exceeded expectations. (Note: Exchange rate is 1 HKD = 0.88 RMB)

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Editor: Shi Lijun

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