Hong Kong stock concept tracking | "Implementation Plan for High-Quality Development of the Aluminum Industry" released. Institutions are optimistic about the improvement of the electrolytic aluminum market (including concept stocks).

In recent times, the profitability of the electrolytic aluminum industry has shown a significant improvement. As of March 10, 2025, the average domestic price of electrolytic aluminum is approximately 20,770 yuan per ton, while the price of alumina is around 3,360 yuan per ton, with changes of 5% and -40% respectively compared to the beginning of the year. With the increase in the price of electrolytic aluminum and the decline in the price of alumina, aluminum enterprises have entered a high level of profit. As of March 10, 2025, the average profit of the domestic electrolytic aluminum industry reached 3,354.51 yuan per ton. From 2022 to 2024, according to the data from Baichuan Yingfu, China's consumption of electrolytic aluminum was 40.35 million tons, 42.76 million tons, and 41.26 million tons, respectively. In 2024, the demand for electrolytic aluminum decreased due to factors such as the real estate market. Institutional outlook for 2025 predicts that the impact of the real estate sector on electrolytic aluminum will weaken due to the low base, while the transportation and electricity sectors will see growth. Assuming that electrolytic aluminum consumption maintains the CAGR of the past three years, the consumption in 2025 is expected to reach around 42.47 million tons, a significant increase from 2024. China Securities Co., Ltd. research report shows that recently, the Ministry of Industry and Information Technology and ten other departments issued the "Implementation Plan for High-quality Development of the Aluminum Industry," which clearly states the implementation of clean energy substitution. Specifically, the plan encourages companies to participate in the development and construction of renewable energy sources such as photovoltaics, wind power, hydrogen energy, and energy storage systems. It also promotes the implementation of clean energy substitution in the processes of alumina roasting and aluminum anode baking. In principle, no new self-owned coal-fired units will be added, and support will be provided for electrolytic aluminum enterprises to implement clean energy substitution for self-owned coal-fired units. Support will be given to companies to increase the proportion of clean energy use through green power trading, purchase of green power certificates, investment in clean energy generation projects, etc. Against the backdrop of China's dual control of energy consumption transformation, the demand for clean energy substitution by high-energy-consuming enterprises is expected to continue to grow, which will help accelerate the development of the green electricity and green certificate markets, and realize the environmental value of wind and solar projects. Hong Kong-listed companies in the electrolytic aluminum-related industry chain: Aluminum Corporation Of China (02600): In 2024, the net profit attributable to the parent company reached 12.4 billion yuan, a year-on-year increase of 85.38%. In Q4, the net profit attributable to the parent company reached 3.383 billion yuan, a year-on-year increase of 147.96% and a quarter-on-quarter increase of 69.14%. The profit contribution from alumina in 2024 increased significantly. Future focus areas: the advantages of integrated layout are evident, and the value of the integrated industrial chain is expected to be reassessed. The company's integrated layout is complete, with a high self-sufficiency rate in upstream bauxite mines and strong risk resistance. By the end of 2024, the company's bauxite reserves were approximately 2.7 billion tons. Under the "China Special Valuation" system, the value is expected to be reassessed. Faced with an unstable geopolitical environment, focusing on "safety" is an important theme for the economy. Electrolytic aluminum is an important resource for the national economy, and as a leader in bauxite mining, alumina, and electrolytic aluminum, the reform of state-owned enterprises is expected to improve efficiency and reassess the company's valuation. As an integrated enterprise in the domestic aluminum industry chain, the company has significant resource security capabilities and its performance elasticity is relatively high with the rise in aluminum prices. CHINAHONGQIAO (01378): CHINAHONGQIAO achieved a record high net profit in 2024, with a high dividend bringing surprises. The net profit in 2024 was 22.4 billion yuan, a year-on-year increase of 95.2%; the company achieved its largest shareholder profit since going public in 2011, mainly benefiting from the favorable cycle of the global aluminum industry. CHINAHONGQIAO will maintain its cost advantage in the field. Firstly, the company has bauxite development projects in Guinea, Indonesia, and Australia. It is worth noting that the bauxite project in Guinea allows the company to obtain bauxite at prices below the market through long-term agreements with minimal price fluctuations. Secondly, with the decline in thermal coal prices in the first quarter of 2025, the company will benefit from lower electricity generation costs. Thirdly, part of the production capacity will gradually transfer to Yunnan, using hydropower supply to further reduce costs. Shandong Nanshan Aluminium International (02610): According to Frost Sullivan's data, as of the end of 2023, Shandong Nanshan Aluminium International is one of the three largest alumina producers in Southeast Asia. The prospectus shows that Shandong Nanshan Aluminum International's revenues for 2021, 2022, and 2023 were US$173 million, US$467 million, and US$678 million, respectively; gross profits were US$44.8 million, US$112 million, and US$198 million, respectively. XINGFA ALUM (00098): XINGFA ALUM announced its performance in 2024, with revenue increasing by 8.7% to approximately 18.854 billion yuan, gross profit decreasing by 11.4% to approximately 1.764 billion yuan, net profit attributable to shareholders increasing by 2.7% to approximately 826 million yuan, earnings per share at 1.96 yuan, and a final dividend of 0.64 Hong Kong dollars per share. The announcement stated that the increase in revenue was mainly due to an increase in sales orders during the year. Annual sales volume increased by 6.8% to approximately 809,300 tons.