Shares of China Hongqiao (01378.HK) climbed more than 5% after the company issued a positive profit alert. As of the latest update, the stock was up 3.86% at HKD 21.54, with a trading turnover of HKD 570 million.

The company announced that it expects its net profit for the first half of 2026 to increase by approximately 39% year-on-year. This anticipated growth is primarily attributed to higher selling prices for the group's aluminum alloy products compared to the same period in 2025. The detailed financial results are scheduled to be disclosed in the interim results announcement, expected to be released before the end of August 2026.

A recent research report from UBS highlighted that market concerns over an oversupply in the aluminum industry have been significantly exaggerated. The report suggests that current share prices already fully, or even excessively, reflect this pessimistic outlook. UBS maintains its "Buy" rating on China Hongqiao, with a core rationale being the highly attractive projected dividend yield. According to UBS forecasts, the company's projected dividend yields for 2026 and 2027 are as high as 10.7% and 11.5%, respectively. The company is providing substantial cash returns to shareholders through a stable payout ratio of 60-65% and ongoing share buybacks.