JP Morgan: Pullback creates buying opportunity, raised target price for CHINAHONGQIAO (01378) to 34 Hong Kong dollars.

Despite CHINAHONGQIAO (01378) reaching a recent high before pulling back, JP Morgan believes that this is a good buying opportunity for investors, as the bank holds a constructive outlook on the aluminum industry for 2026. JP Morgan maintains its "overweight" rating on CHINAHONGQIAO and has raised its target price from HK$26.5 to HK$34. JP Morgan holds a constructive outlook on the aluminum industry for 2026, supported by the resilience of global demand, the increase in copper prices, and healthy smelting profit margins. The bank's base forecast is that new supply from Indonesia will bring a moderate surplus in 2026, but potential supply disruptions and a slowdown in overseas restart rates could make the market tighter than their base forecast. The bank remains positive on aluminum stocks and expects high volatility in the near term, projecting earnings growth of 10-16% for the 2026 fiscal year. JP Morgan believes that CHINAHONGQIAO's valuation is currently undervalued. As one of the key producers of Aluminum Corporation Of China, CHINAHONGQIAO is expected to benefit from this trend and maintain healthy margin profits. Additionally, CHINAHONGQIAO's low production costs give it a competitive edge among global peers. Another factor supporting JP Morgan's optimistic view on CHINAHONGQIAO is its emphasis on shareholder returns. In fact, the group's dividend yield of over 6% provides solid support for its stock price.