HK Stock Market Move | CHINAHONGQIAO (01378) rose by more than 4%, supply shortage situation will support aluminum prices, company's high dividend payout ratio will reward investors

CHINAHONGQIAO (01378) rallied more than 4%, rising 4.32% to HK$36.74 as of the time of writing, with a turnover of HK$2.08 billion. On the news front, CMB International believes that due to the continued global aluminum supply shortage pattern in 2026 to 2027, coupled with the dual positive factors of rising aluminum prices and declining alumina prices, it has raised its profit forecast for CHINAHONGQIAO and raised its target price from HK$39 to HK$45, maintaining a "buy" rating. CMB International pointed out that the current utilization rate of China's primary aluminum production capacity is close to the policy limit of 99%, and the limited release of overseas new capacity will support the global aluminum market to maintain a shortage status. It is expected that the average aluminum price will rise by 15% year-on-year in 2026. In addition, in terms of profit performance, CHINAHONGQIAO's core net profit is expected to reach RMB 26.262 billion in 2025, a year-on-year increase of 7%; the net profit growth rate in 2026 will accelerate to 34%, mainly driven by the rise in aluminum prices. Guosen pointed out that the company is a leading global aluminum industry enterprise with a production capacity of 19 million tons of alumina and 6.46 million tons of aluminum. It is the world's second largest aluminum producer. The company adheres to a high dividend payout ratio and announced in May 2025 the shareholder return plan for the next three years (2025-2027): When profit distribution is made for companies in the mature stage of development with no major capital expenditure arrangements, the proportion of cash dividends in this profit distribution should account for at least 80%. The company's dividend payout ratio is the highest in the aluminum industry.