HK Stock Market Move | CHINAHONGQIAO (01378) rises more than 3% in the afternoon, with strong aluminum prices and aluminum oxide price reductions. The market is optimistic about the company's enhanced profitability in the aluminum business.

CHINAHONGQIAO (01378) rose more than 3% in the afternoon, with a 3.41% increase by the time of publication, reaching HK$12.72, with a turnover of HK$2.93 billion. DBS released a research report stating that with the development of emerging sectors such as new energy vehicles, CECEP Solar Energy solar panels, Siasun Robot&Automation, and 5G applications, aluminum demand is expected to steadily increase. China's aluminum production capacity is close to full capacity, with limited new supply providing strong support for aluminum prices. The bank predicts that aluminum prices will rise by 7.8% by 2025. Additionally, DBS believes that the irrational rise in alumina prices in the fourth quarter of 2024 will not continue, and with the decline in alumina prices and the resilience of aluminum prices in 2025, the profitability of aluminum will improve. DBS lists CHINAHONGQIAO as its top pick in the research report, citing the company's steady growth, high profitability compared to peers, and attractive dividend yield. DBS believes that with the support of falling alumina prices and high aluminum alloy product prices, the profitability of its aluminum business will strengthen. DBS predicts that between 2023-2026, CHINAHONGQIAO's revenue compound annual growth rate will be 6%, and the profit compound annual growth rate will be 23%.