CHUANGXIN IND Group Limited (Stock Code: 02788.HK) has initiated its IPO, with the subscription period running from November 14 to November 19. The company is scheduled to list on the Hong Kong Stock Exchange's main board on November 24. CICC and Huatai International are acting as joint sponsors for the offering. Prior to the greenshoe option, the company plans to issue 500 million shares globally, with an indicative price range of HKD 10.18 to HKD 10.99 per share, potentially raising up to HKD 5.495 billion. This translates to a valuation range of HKD 20.36 billion to HKD 21.98 billion.

CHUANGXIN IND (02788) specializes in high-value-added alumina refining and electrolytic aluminum smelting, key segments of the aluminum supply chain. Its electrolytic aluminum serves as a critical raw material, processed into various aluminum alloys for applications in 3C electronics, automotive lightweighting, renewable energy, transportation, industrial materials, and construction.

The aluminum industry currently faces a structural supply-demand imbalance. Surging demand from sectors like new energy vehicles (NEVs) and solar energy storage contrasts with constrained global electrolytic aluminum capacity due to environmental policies, creating a prolonged supply deficit. As a major upstream player, CHUANGXIN IND is well-positioned to capitalize on this high-growth cycle, backed by its integrated supply chain and robust fundamentals.

**Integrated Supply Chain Drives Steady Growth** Financial performance underscores the company’s strength. From 2022 to 2024, CHUANGXIN IND’s revenue grew from RMB 13.49 billion to RMB 15.163 billion (all figures in RMB unless stated), achieving a 6.0% CAGR. Net profit surged from RMB 913 million to RMB 2.63 billion, reflecting a 60%+ CAGR.

This growth stems from the company’s vertically integrated "energy-alumina refining-electrolytic aluminum smelting" ecosystem, which ensures self-sufficiency in raw materials and energy while mitigating cyclical risks. Notably, alumina and related products now contribute 21.1% of total revenue (2025 YTD), up from 2.0% in 2022. With an 84% alumina self-sufficiency rate in 2024, the company effectively hedges against price volatility and captures margin upside.

Energy security further bolsters resilience. The company’s Inner Mongolia smelting base is supported by a captive coal-fired power plant. It is also transitioning to green energy, with a 510 MW hybrid wind-solar project underway. As of the latest update, the wind farm is operational, while the solar installation is partially online, with full completion expected by December 2026. Post-grid connection, green power’s share will rise significantly. In 2024, the company’s 88% power self-sufficiency rate far exceeded the industry average of 57% (CRU data).

**Cost Leadership and Operational Efficiency** CHUANGXIN IND excels in cost control, a critical edge in the energy-intensive aluminum sector. Its 2024 smelting power consumption of 13,366 kWh/ton outperformed the industry average (13,670 kWh/ton), with further reductions to 13,290 kWh/ton targeted by end-2025.

Automation and lean management drive productivity: annual per-worker output of 590–670 tons is 2.2–2.6x the industry norm. This underpins a cash cost of RMB 15,112/ton (2024), well below China’s average of RMB 17,700/ton (CRU), placing the company in the top 5% of domestic and top 30% of global smelters for cost efficiency.

Financially, the cost-to-revenue ratio dropped from 84.9% (2022) to 71.8% (2024), while H1 2025 interest expenses fell 28.4% YoY. Green power’s lower costs versus thermal energy will further enhance margins.

**Sector Tailwinds and Overseas Expansion** The electrolytic aluminum market is entering a sustained upcycle, fueled by NEVs, renewables, and power infrastructure. Demand growth contrasts with capacity constraints—China’s 45 million-ton annual cap (per MIIT) has pushed utilization to 96% (2025), with a projected 1 million+ ton annual deficit by 2034.

CHUANGXIN IND is tapping overseas opportunities via a 500,000-ton Saudi Arabia project, aligning with Belt and Road initiatives. The Middle East’s 4.6% CAGR aluminum demand growth (CRU 2025–28) and low energy costs (versus China) offer a compelling cost advantage.

With its integrated model, cost leadership, and Saudi expansion, CHUANGXIN IND is poised to thrive in the aluminum sector’s long-term growth trajectory, driving both earnings and valuation upside.