Morgan Stanley recently released a research report stating that CHINAHONGQIAO (01378) is a primary beneficiary of the aluminum industry's structural demand transformation and supply constraints, maintaining an "Overweight" rating on the stock while raising the target price from HK$26.4 to HK$30.6.

Morgan Stanley stated that the reasons for maintaining the "Overweight" rating on CHINAHONGQIAO include: 1) Supply constraints - the Chinese government's set capacity ceiling of 45 million tons limits aluminum industry expansion; 2) Low inventory levels and potential third-quarter stimulus measures help support aluminum prices at elevated levels; 3) Declining costs improve profit margins - lower electricity prices from capacity migration and falling coal prices help reduce the company's production costs, thereby enhancing profit margins; 4) Integrated upstream and downstream operations - integration of upstream raw materials and downstream processing businesses is expected to bring steady profit momentum; 5) Attractive valuation - despite the company's excellent stock performance, current valuation remains attractive, and dividend yield is also appealing.

Morgan Stanley added that the stock's investment drivers include: 1) More stable production - compared to peers, the company's excellent performance in environmental management helps maintain stable output; 2) Downstream demand growth exceeding expectations - strong demand from construction, power, and manufacturing sectors; 3) Cost savings - achieving cost reductions through lower electricity prices.