CHINAHONGQIAO (01378) saw its shares rise more than 4% during morning trading. At the time of writing, the stock was up 4.01%, trading at HKD 37.86 with a turnover of HKD 236 million.

A research report from GF Securities indicated that against a backdrop of improving demand for electrolytic aluminum, supply constraints are becoming more pronounced, and the potential for aluminum price increases should not be overlooked. As of the end of March 2025, CHINAHONGQIAO possesses an electrolytic aluminum production capacity of 6.459 million tons, with stable production and sales and declining costs. It is projected that rising aluminum prices in 2026 will significantly enhance the company's core profit flexibility.

The report further noted that data shows the company's annual cash dividend payout ratios for 2022 to 2024 were 49%, 48%, and 64%, respectively. Under the assumption of an aluminum price including tax of RMB 23,000 per ton, the company's net profit attributable to shareholders could reach RMB 32.74 billion in 2026. Assuming the dividend payout ratio remains at 64%, the dividend yield would be 6.7% based on the market capitalization as of February 9. There is anticipation that the high dividend payout ratio will be sustained.