Despite CHINAHONGQIAO (01378) experiencing a pullback after reaching recent highs, JPMorgan views this as a favorable buying opportunity for investors. The bank maintains a constructive outlook on the aluminum industry for 2026, supported by resilient global demand, rising copper prices, and healthy smelting margins.

JPMorgan has reaffirmed its "Overweight" rating on CHINAHONGQIAO and raised its target price from HK$26.5 to HK$34. The bank's base scenario anticipates moderate oversupply from new Indonesian production in 2026, but potential supply disruptions and slower overseas capacity restarts could tighten the market beyond expectations.

Remaining bullish on aluminum equities, JPMorgan expects heightened near-term volatility, with projected earnings growth of 10-16% for FY2026. The bank considers CHINAHONGQIAO's current valuation undervalued.

As one of China's leading aluminum producers, CHINAHONGQIAO is well-positioned to benefit from industry trends while maintaining robust margins. Its competitive low production costs further enhance its global standing.

Another factor underpinning JPMorgan's optimism is the company's commitment to shareholder returns, with its above 6% dividend yield providing solid support for the stock price.