HK Stock Market Move | CHINAHONGQIAO(01378) rises by more than 6% to continue to hit new highs. Citigroup predicts that the aluminum industry's gross profit will remain high in the long term. The company's dividend yield still remains attractive.

CHINAHONGQIAO (01378) rose more than 6% in early trading, reaching a high of HK$31.44, continuing to set new historical highs. As of the time of writing, it has risen by 5.36% to HK$31.08, with a turnover of HK$263 million. Citi released a research report stating that the aluminum industry is still one of Citi's favorite industries, as the bank expects aluminum supply to remain tight. This is due to China's capacity cap policy (annual capacity of 45.2 million tons) and the absence of explosive capacity increases in Indonesia, resulting in high aluminum industry gross margins in the long term. Citi has raised its profit forecasts for CHINAHONGQIAO for 2025/26/27 by +2%/+5%/+7% respectively to RMB 24.4 billion/27.9 billion/30.3 billion, reflecting higher aluminum and alumina sales volumes and higher aluminum price forecasts. It is worth noting that the company is focused on maintaining a high dividend payout ratio and share buybacks for shareholder returns. Despite the strong performance of the stock price so far this year, as of the close on November 4th, Hongqiao's forecast dividend yield for 2026 remains attractive at 6.7%. Citi expects Hongqiao to continue benefiting from high aluminum industry gross margins in the long term, and the stock will continue to be revalued. They maintain a "buy" rating on CHINAHONGQIAO and have raised their target price from HK$25.2 to HK$36, with Hongqiao as their top pick.