Debon Securities: CHINAHONGQIAO's main products see both volume and price increase, driving continuous performance growth in the first half of the year; maintains a "Buy" rating

According to the Zhitong Finance APP, Debang Securities has released a research report maintaining a "Buy" rating for CHINAHONGQIAO (01378), expecting the company's net profit for 2025-2027 to be 23.5 billion, 25.5 billion, and 26.1 billion yuan respectively. On August 15, CHINAHONGQIAO announced that in the first half of 2025, the company achieved total operating revenue of 81.039 billion yuan, a year-on-year increase of 8.48%; pre-tax profit was 17.764 billion yuan, a year-on-year increase of 28.07%; and net profit was 12.361 billion yuan, a year-on-year increase of 35.02%. The simultaneous increase in both volume and price of the company's main products has driven continuous growth in the company's performance.

Key Points from Debang Securities:

Simultaneous Increase in Volume and Price of Main Business, Driving Company Performance Upward

In terms of alumina, the company achieved alumina product sales of 6.368 million tons in the first half of the year, a year-on-year increase of 15.6%; the average price increased by approximately 10.3% year-on-year to 3,242 yuan/ton (excluding VAT). In terms of electrolytic aluminum, the company achieved aluminum alloy product sales of 2.906 million tons in the first half of the year, a year-on-year increase of approximately 2.4%; the average price increased by approximately 2.7% year-on-year to 17,853 yuan/ton (excluding VAT). In terms of aluminum processing products, the company achieved aluminum alloy processing product sales of 392,000 tons in the first half of the year, a year-on-year increase of approximately 3.5%; the average price increased by approximately 2.9% year-on-year to 20,615 yuan/ton (excluding VAT). The simultaneous increase in both volume and price of the company's main products has driven continuous growth in the company's performance.

High Operating Rate of Yunnan Electrolytic Aluminum, Enhancing Company Competitiveness in Green Aluminum Layout

From the operating situation of the electrolytic aluminum industry in Yunnan, since June 2024, the operating rate of the Yunnan electrolytic aluminum industry has remained high, and related enterprises have not been affected by power supply issues. On the company side, during the reporting period, the company further advanced its green energy strategic transformation, enriching a new power supply model of diversified coexistence and multi-energy complementarity, ensuring that the proportion of clean energy continues to rise. The company's green aluminum layout in Yunnan is expected to continuously enhance its competitiveness in the industry in the future.

Launching Share Buyback to Enhance Market Confidence

The company recently disclosed a new round of share buyback plans, expecting a total buyback amount of 234 million Hong Kong dollars, with the repurchased shares equivalent to 0.11% of the issued shares on the announcement date. With the current simultaneous increase in both volume and price of the company's main business, the timely launch of the share buyback is expected to further strengthen the company's image and enhance investor confidence.

Investment Recommendation

The company has a complete industrial chain, allowing it to obtain benefits from both upstream and downstream in the electrolytic aluminum industry. As the proportion of green electricity aluminum continues to rise, its profitability and social contribution are expected to continue to expand. The company is expected to achieve net profits of 23.5 billion, 25.5 billion, and 26.1 billion yuan for 2025-2027.

Risk Warning

The situation of power restrictions and production limits in Yunnan electrolytic aluminum may worsen, domestic economic recovery may be lower than expected, and changes in electrolytic aluminum industry policies