CMBI Initiates Coverage on Chuangxin Industrial with Buy Rating, Sets HK$32 Target Price

Stock News
Feb 05

CMB International has issued a research report initiating coverage on Chuangxin Industrial (02788) with a "Buy" rating and a target price of HK$32. The bank believes Chuangxin Industrial is poised for inclusion in the Hong Kong Stock Connect program as early as March this year, a move expected to significantly broaden its investor base. On the cost front, the company currently enjoys a competitive advantage in electricity expenses, and the upcoming commissioning of its self-built wind and solar power facilities between 2026 and 2027 is projected to further reduce production costs. Regarding growth, Chuangxin Industrial is currently establishing new electrolytic aluminum capacity in Saudi Arabia through a joint venture. Following a new round of investment from the Saudi Arabian Public Investment Fund, the bank believes the project's execution timeline is well-supported. From an industry perspective, the bank anticipates that tight supply conditions in the electrolytic aluminum market will provide robust support for aluminum prices. According to the bank's calculations, for every 1% increase in the price of electrolytic aluminum, Chuangxin Industrial's 2026 profits are expected to rise by 2.5%.

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