Shares of China Hongqiao (01378) have extended gains by more than 8%, rising 8.1% to HK$23.2 at the time of writing, with a turnover of HK$19.18 billion.
Recent developments in the Middle East, including ongoing U.S.-Iran tensions, have introduced new uncertainties. Guoxin Futures suggests the escalation of geopolitical risks has heightened market risk aversion, leading to significant declines in equity markets and a stronger U.S. dollar, which has exerted pressure on the non-ferrous metals sector. However, aluminum has demonstrated relative resilience, partly due to the return of a geopolitical risk premium.
Hundun Tiancheng Futures notes that with the potential for the Strait of Hormuz to be blocked again, expectations for the resumption of aluminum production in the Middle East have weakened, providing some support for aluminum prices. The future trajectory of prices will depend on the evolving geopolitical situation; a prolonged blockade could create an upward driver for aluminum prices if it leads to production disruptions or raw material shortages.
On the performance front, China Hongqiao recently issued a positive profit alert. Bank of America Securities points out that the company's net profit for the first half of 2026 is expected to increase by approximately 39% year-on-year, primarily driven by higher average selling prices for aluminum alloys. Based on a net profit of about RMB 135 billion in the first half of 2025, this guidance implies a net profit of around RMB 188 billion for the first half of 2026.
Assuming a similar year-on-year growth rate for net profit attributable to shareholders, it is estimated to reach approximately RMB 172 billion for the first half of 2026, which is broadly in line with the securities firm's expectations. Based on the estimated net profit attributable to shareholders of RMB 77 to 80 billion for the first quarter of 2026, this implies a second-quarter figure of RMB 92 to 95 billion, representing a sequential growth of about 20% and indicating an acceleration in profit momentum quarter-on-quarter.