CHINAHONGQIAO once rose 8% to a new high, expecting a profit increase of about 35% for the interim period, with major banks singing praises

AASTOCKS
2025.06.24 02:59

CHINAHONGQIAO (01378.HK) issued a profit warning, expecting to earn about 35% more in the interim period. Today (24th), the stock price hit a new high, rising 8.2% to a peak of HKD 17.28. It is currently reported at HKD 16.9, up 6.29%, with a trading volume of 31.2522 million shares, involving HKD 530 million.

CHINAHONGQIAO announced after the market closed on the previous day (23rd) that it expects net profit for the six months ending in June to increase by about 35% compared to the same period last year. This is mainly due to the increase in sales prices of the group's aluminum alloy products and alumina products compared to the same period in 2024, along with an increase in sales volume. Benefiting from positive factors, the gross profit of related products has increased.

UBS stated that assuming a fair value loss of convertible bonds is RMB 1.1 billion, CHINAHONGQIAO's core earnings for the first half of 2025 exceed the bank's forecast by 5%, also surpassing the market consensus expectation by 4% to 8%. It is expected that investors will respond positively, maintaining a "Buy" rating with a target price of HKD 16.5.

Bank of America Securities estimates that CHINAHONGQIAO's net profit for the first half of the year is RMB 12.4 billion, reaching 57% of the market's full-year consensus expectation, exceeding expectations. Assuming the interim dividend payout ratio remains at 56%, the estimated dividend per share is about RMB 0.745, resulting in an interim dividend yield of 5%. The final profit for the first half may exceed the profit warning due to the recent upward trend in aluminum prices. It maintains a "Buy" rating for CHINAHONGQIAO based on its optimistic view on aluminum prices and robust dividend yield, with a target price of HKD 16.

Morgan Stanley stated that CHINAHONGQIAO's interim profit exceeded expectations, and it is expected that profit resilience will continue in the second half of this year. The higher dividend payout ratio and yield are other attractive highlights for investors, maintaining an "Overweight" rating with a target price of HKD 18.5.

Citi estimates that CHINAHONGQIAO's net profit for the second quarter is RMB 5.3 billion, a year-on-year increase of 3% and a quarter-on-quarter decrease of 11%, slightly higher than the bank's expectations. Assuming a payout ratio of 60%, the estimated interim dividend per share is HKD 0.86. It maintains a "Buy" rating with a target price of HKD 21.

Futu pointed out that CHINAHONGQIAO's profit for the first half of the year is higher than the bank's forecast of RMB 11.5 billion, and operating profit may exceed the profit warning, maintaining a "Buy" rating with a target price of HKD 17.7

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