Guolian Minsheng released a research report highlighting CHUANGXIN IND (02788) as a vertically integrated player in energy-alumina-aluminum production. The company’s aluminum capacity is strategically located in Inner Mongolia, benefiting from lower energy costs. With future green power integration, its production costs are expected to decline further. The firm is expanding overseas with a new aluminum project in Saudi Arabia, positioning itself as a rare growth story in the sector.

Amid tight supply-demand dynamics and rising aluminum prices, the brokerage forecasts 2025–2027 net profits of RMB2.32/4.03/4.73 billion, translating to a P/E of 16x/9x/8x. Initiating coverage with a "Buy" rating, Guolian Minsheng outlines the following key points:

**Vertically Integrated with Saudi Expansion** CHUANGXIN IND operates integrated alumina and aluminum smelting, with domestic capacities of 788k tons of aluminum and 3.2 million tons of alumina (self-sufficiency >100%). Its Saudi project, targeting 500k tons of aluminum/ alloy capacity, will be a new growth driver. IPO proceeds will fund this and domestic green energy initiatives, reinforcing its unique position in the industry.

**Cost Advantages in Inner Mongolia** The company’s aluminum facilities in Inner Mongolia leverage local coal resources for captive power, ensuring competitive electricity costs. Transitioning to wind power (costing RMB0.1–0.18/kWh) will further enhance its cost edge.

**Strong Earnings Momentum** Despite relying on imported bauxite, CHUANGXIN IND has maintained high utilization rates, with aluminum output reaching 744k/758k/755k/311k tons in 2022–2025 (Jan–May). Sales primarily go to its major client, CHUANGXIN New Materials. Robust aluminum prices drove 2024 revenue up 9.8% YoY and net profit up 104.8%, with 2025 (Jan–May) revenue rising 22.6%.

**Saudi Project to Unlock Growth** The Red Sea aluminum project (33.6% owned by CHUANGXIN IND), developed with partners, targets 500k tons of capacity for Saudi and欧美 markets. With low gas-based power costs and an 18–24 month timeline, production is expected by 2027. Potential equity injections from关联方 could further boost earnings contributions.