HK Stock Market Move | CHINAHONGQIAO (01378) rose more than 5%, Core assets plan to be listed domestically, Company net profit is expected to continue benefiting from the rise in aluminum prices.

CHINAHONGQIAO (01378) rose more than 5%, at the time of writing, it rose by 5.43% to 12.04 Hong Kong dollars, with a turnover of 153 million Hong Kong dollars. On the news front, on December 23 last year, CHINAHONGQIAO and its affiliate Shandong Hontron Aluminum Industry Holding jointly announced that Shandong Hontron Aluminum Industry Holding is planning to acquire 100% equity of Hongtuo Industrial by issuing shares. The information disclosed by Shandong Hontron Aluminum Industry Holding shows that Hongtuo Industrial currently owns all the aluminum alloy products, alumina products, and some aluminum alloy processing production lines of CHINAHONGQIAO Group and its affiliates in Mainland China. It is worth noting that this acquisition can also be seen as an internal asset transfer of the "Weiqiao Group", as both companies are controlled by the family of Zhang Bo, the controlling shareholder of the aluminum industry giant Weiqiao Pioneering Group. Guolian believes that this transaction is beneficial for enhancing the asset securitization level and market influence of CHINAHONGQIAO, achieving asset integration to improve management efficiency and performance, and promoting the company's long-term development. This transaction is expected to help boost the company's H-share valuation level after completion. Guotai Junan expects that CHINAHONGQIAO's net profit in 2025 will continue to benefit from the rise in aluminum prices. CHINAHONGQIAO has the world's largest primary aluminum production capacity, producing about 6 million tons of primary aluminum annually. With a high self-sufficiency rate in bauxite, alumina, and electricity, the company has better cost control capabilities compared to peers, especially in terms of material costs for producing primary aluminum. Therefore, its net profit is highly sensitive to changes in aluminum prices. The bank predicts that CHINAHONGQIAO will benefit more from the rise in aluminum prices compared to its peers.