Zheshang Securities has released a research report stating that CHUANGXIN IND (02788) announced H1 2026 revenue of 11.533 billion yuan, up 32.42% year-on-year; net profit attributable to shareholders of 2.305 billion yuan, up 166.15% year-on-year; and non-GAAP net profit attributable to shareholders of 2.278 billion yuan, up 146.92% year-on-year. The brokerage forecasts the company to achieve operating revenue of 21.856 billion, 22.293 billion, and 22.516 billion yuan for 2026-2028, with net profit attributable to shareholders of 4.409 billion, 5.341 billion, and 6.233 billion yuan respectively. Based on the current market capitalization, the corresponding PE valuations are 6.02x, 4.97x, and 4.25x, and the "Buy" rating is maintained.
Electrolytic Aluminum Price Center Moves Up, Power Sales Business Contributes Incremental Revenue
In H1 2026, the company's electrolytic aluminum, alumina, and other related products achieved operating revenue of 8.025 billion yuan and 2.520 billion yuan respectively, up 21.18% and 34.41% year-on-year, accounting for 69.58% and 21.85% of total revenue respectively. Other products, including waste materials, electricity, and steam supply, generated operating revenue of 988 million yuan, up 366.13% year-on-year, with their revenue share rising from 2.43% in the same period last year to 8.57%. By category, the revenue growth in electrolytic aluminum was mainly driven by higher sales prices, with the average spot aluminum price on the Shanghai Futures Exchange rising 19.4% year-on-year to 24,300 yuan per tonne in H1, and the average LME cash month price climbing 33.2% year-on-year to US$3,382 per tonne. The revenue growth in alumina and other related products was primarily due to increased production and sales volumes. The sharp increase in other product revenue was driven by the expansion of the power sales business, with electricity revenue reaching 710 million yuan in the reporting period compared to 115 million yuan in the same period last year.
Cost Advantages Continue to Materialize, Green Power Substitution Opens Room for Cost Reduction
In H1 2026, the company's fully loaded cost per tonne of aluminum including tax was approximately 14,500 yuan, which was 1,605 yuan per tonne lower than the national weighted average fully loaded cost of 16,100 yuan per tonne for electrolytic aluminum including tax. The decline in raw material procurement prices, combined with green power substitution and technical upgrades to reduce electricity consumption, led to a 10.2% year-on-year decrease in electrolytic aluminum sales costs to 4.543 billion yuan in H1 2026. On the power side, the company has built six coal-fired power generating units with a total installed capacity of 330.0 megawatts to support its 788,100-tonne electrolytic aluminum production capacity, and is constructing wind and solar power stations with a total installed capacity of 1,750.0 megawatts. By the end of the period, 1,040 megawatts of wind power and 110 megawatts of solar power had been completed, with a green energy installation completion rate of approximately 66%. Once fully built, the share of green power usage will exceed 50%, far surpassing the national industrial policy target of 25%. On the raw material side, the company's existing alumina and power self-sufficiency can fully cover production and operations. In H1 2026, the alumina segment's inter-segment sales amounted to 660 million yuan. Raw material self-supply combined with lower alumina prices significantly eased cost pressure.
Integrated Closed-Loop Further Strengthened, Saudi Project Advancing on Schedule
On the resource side, in H1 2026, the company acquired 100% equity of Tongliao Zhihui Mining for 1.001 billion yuan, obtaining the exploration rights for Huolinhe No. 4 Coal Field. The mine is still in the exploration and development stage and will provide long-term fuel supply security for the captive power plant. On the smelting side, the company acquired the remaining 41.5% equity of Shandong Chuangyuan for 526 million yuan. After the transaction, Shandong Chuangyuan became a wholly-owned subsidiary, reducing operational risks caused by raw material price fluctuations and ensuring long-term stable production operations. The alumina production capacity is 1.8 million tonnes per year, and with the 2 million tonnes per year roasting capacity under construction, it will reach 3.8 million tonnes once completed. On the overseas side, the company's 500,000-tonne per year electrolytic aluminum project in Saudi Arabia, in which it holds a 33.6% stake, has fully commenced construction and is expected to be commissioned in 2027. The company stated that once the project is fully operational, its total electrolytic aluminum production capacity will achieve a significant leap.
Risk Warnings
Significant fluctuations in electrolytic aluminum product prices; significant fluctuations in energy prices; green energy project construction and grid connection progress falling short of expectations; Saudi project construction and commissioning progress and geopolitical risks; risks related to the unlocking of restricted shares.