Huaan: Maintain Buy rating on CHINAHONGQIAO (01378) as aluminum prices rise, driving performance growth.

Huaan released a research report stating that CHINAHONGQIAO (01378) announced its performance for the first half of 2026. The company achieved an operating revenue of 87.506 billion yuan in the first half of 2026, a year-on-year increase of 7.98%; a net profit of 17.210 billion yuan, a year-on-year increase of 39.23%; and a net profit attributable to the parent company of 16.232 billion yuan, a year-on-year increase of 12.21%. Huaan maintains its "Buy" rating, forecasting that the net profit attributable to the parent company for 2026-2028 will be 34.276 billion, 35.195 billion, and 36.889 billion yuan respectively (previous estimates were 25.791 billion, 27.686 billion, and 29.239 billion yuan, adjusted for the increase in electrolytic aluminum prices), corresponding to P/E ratios of 5.99, 5.84, and 5.57 times. Huaan's key points are as follows: Rising aluminum prices drive performance growth In the first half of 2026, the company's revenue from aluminum alloy products reached 59.575 billion yuan, a year-on-year increase of 14.84%; revenue from alumina was 16.094 billion yuan, a year-on-year decrease of 22.08%; and revenue from aluminum processing products totaled 10.395 billion yuan, a year-on-year increase of 39.74%. In terms of volume: the company's sales of aluminum alloy products for the first half of 2026 were 2.811 million tons, a year-on-year decrease of 3.3%; alumina sales were 6.917 million tons, a year-on-year increase of 8.6%. In terms of pricing: the average selling price for aluminum alloy products in the first half of 2026 was 21,192 yuan/ton, a year-on-year increase of 18.7%; the average price for alumina was 2,327 yuan/ton, a year-on-year decrease of 28.3%. Continuous repurchase and increase in holdings demonstrate development confidence In the first half of 2026, the company repurchased shares totaling 5.2 billion Hong Kong dollars and completed cancellations, continuously optimizing its share structure, increasing earnings per share, and enhancing long-term shareholder returns. In the first half of 2026, the controlling shareholder, Shandong Hongqiao Aluminum Industry Holding, collectively increased its holdings by 41.5 million shares, demonstrating the major shareholder's strong confidence in the company's development prospects. Investment proposal The firm anticipates that the company's net profit attributable to the parent company for 2026-2028 will be 34.276 billion, 35.195 billion, and 36.889 billion yuan respectively (previous estimates were 25.791 billion, 27.686 billion, and 29.239 billion yuan, adjusted for the increase in electrolytic aluminum prices), corresponding to P/E ratios of 5.99, 5.84, and 5.57 times, maintaining a "Buy" rating. Risk warning Significant fluctuations in aluminum prices; capacity releases not meeting expectations; substantial fluctuations in energy and raw material prices; operational risks abroad, etc.