Kaiyuan Securities released a research report stating that CHINAHONGQIAO (01378) achieved revenue of RMB 81.039 billion in H1 2025, up 8.48% year-on-year; net profit attributable to shareholders reached RMB 12.361 billion, up 35.02% year-on-year, primarily due to year-on-year increases in both alumina and electrolytic aluminum prices during H1 2025. Considering the company's increased electrolytic aluminum equity capacity in 2025 and aluminum prices operating at high levels, the firm expects the company to achieve net profits attributable to shareholders of RMB 24.259 billion, RMB 26.739 billion, and RMB 29.186 billion for 2025-2027, representing year-on-year growth of 8.43%, 10.22%, and 9.15% respectively, with EPS of RMB 2.56, RMB 2.82, and RMB 3.07 per share. The firm maintains a "Buy" rating on the company.

Kaiyuan Securities' main viewpoints are as follows:

**Strong Performance in H1 2025 with Both Volume and Price Increases**

In terms of production and sales, H1 2025 saw aluminum alloy product sales of 2.906 million tons, up 2.4% year-on-year, aluminum processing product sales of 392,000 tons, up 3.4% year-on-year, and alumina sales of 6.368 million tons, up 15.6% year-on-year, with all product sales volumes maintaining stability. Regarding selling prices, aluminum alloy products increased by RMB 470.6 per ton year-on-year to RMB 17,852 per ton (excluding VAT, same below) in H1 2025, aluminum processing products increased by RMB 592.2 per ton to RMB 20,597.7 per ton, and alumina increased by RMB 301.9 per ton to RMB 3,243.6 per ton. In terms of sales costs, aluminum alloy product costs increased by RMB 245.2 per ton year-on-year in H1 2025, while alumina costs increased by RMB 116.4 per ton. Benefiting from both volume and price increases across the company's main products, CHINAHONGQIAO delivered outstanding performance in H1 2025.

**Acquisition of Remaining 25% Stake in Yunnan Hongtai Increases Electrolytic Aluminum Equity Capacity, Share Repurchase Demonstrates Development Confidence**

On July 23, 2025, Wenshan Prefecture Caixin Industrial Investment Co., Ltd. exited Yunnan Hongtai, with Yunnan Hongqiao holding 100% of Yunnan Hongtai with a subscribed capital contribution of RMB 9 billion. As a result, CHINAHONGQIAO's shareholding in Yunnan Hongtai increased from 67.55% to 90.07%. Yunnan Hongtai owns 2.03 million tons of electrolytic aluminum capacity, corresponding to an increase in equity capacity of 457,000 tons. Additionally, the company plans to conduct share repurchases with a total amount of no less than HKD 3 billion, demonstrating the company's development confidence.

**Risk Warnings:** (1) Significant fluctuations in coal, aluminum, and alumina prices; (2) Production restrictions in Yunnan exceeding expectations, etc.