Hong Kong stocks welcome the leading company in electrolytic aluminum, and the industry's high prosperity catalyzes growth expectations for (02788).

Since the beginning of this year, the Hong Kong IPO market has remained active. With the dual drive of policy dividends and improved liquidity, Hong Kong has welcomed a total of 80 IPOs in the first 10 months, raising a total of over $26 billion, ranking first in the world in terms of IPO fundraising. On November 24, (02788) officially listed on the Hong Kong Stock Exchange, with an issue price of HK$10.99 per share, raising approximately HK$5.5 billion. The company introduced 17 well-known cornerstone investors including Hillhouse, CHINAHONGQIAO, Taikang Life, Jinglin, Yusen, China Pacific Insurance, GF Fund, and Franklin Templeton, with a total subscription of approximately $351 million, demonstrating institutional investors' high recognition of its fundamentals. Brokerage data shows that the IPO received enthusiastic response from investors during the public offering stage, with oversubscription of over 40 times in the international placement, attracting more than 300 top global institutions to subscribe eagerly, including sovereign wealth funds, top international long-term institutions, and several Chinese long-term institutions. The Hong Kong public offering was oversubscribed by nearly 450 times, making it a rare high-demand new stock this year, with strong market participation. Based on the current fundraising scale, the amount raised in this issuance is expected to rank among the top ten for the year, excluding A+H shares. The listing fundraising amount is expected to enter the top three for the year. The company's grey market trading performance was also impressive, with both Hui Li and Futu platforms seeing significant gains. Hui Li rose by 30.57% in the grey market, closing at HK$14.35, while Futu rose by 26.02%, closing at HK$13.85. Data shows that in the first half of this year, the average increase in the grey market for the 42 new stocks listed in Hong Kong was 15.9%, with an average first-day increase of 13.3%. With strong grey market momentum, there is a high probability of achieving a decent increase on the first day of listing. Looking at the company's fundamentals, Innovation International has shown excellent performance in the past, with revenue continuing to rise from 2022 to 2024, and net profit increasing significantly from 913 million to 2.63 billion, with a compound annual growth rate of over 60% and strong profitability. In addition, the company's integrated industrial chain layout, excellent cost control capabilities, and the potential incremental growth of the Saudi project will all contribute to the company's long-term growth potential exceeding that of its peers. The investment value of the future growth driven by the dual wheels of "endogenous + exogenous" lies first in its solid "endogenous" moat. During the reporting period, the company continued to improve its integrated industrial chain ecology of "energy-alumina refining-electrolytic aluminum smelting," achieving high self-sufficiency in key raw materials and energy. This strong complementary and synergistic layout effectively enhances the company's profitability certainty in industry fluctuations. In terms of business composition, from 2022 to May 2025, the company's alumina and related product revenue proportion increased from 2.0% to 21.1%, and the company's alumina self-sufficiency rate reached about 84% in 2024. With the continuous expansion of revenue sources, operational resilience continues to improve, and high self-sufficiency will transform external price fluctuations into internal cost advantages, significantly smoothing out the impact of cycles on performance. In terms of energy self-sufficiency, the company's electrolytic aluminum production base in Inner Mongolia is equipped with a self-supplied coal-fired power plant. By 2024, the company's electricity self-sufficiency rate reached 88%, far higher than the industry average of about 57% as reported by CRU, and it has been maintaining its leading position in the industry. By virtue of its excellent cost control capabilities, from 2022 to 2024, the company's sales cost as a percentage of total revenue continued to decline, from 84.9% to 71.8%; in the first five months of 2025, financial expenses decreased by 28.4% year-on-year, maintaining a strong financial health at the industry-leading level. In terms of "exogenous" expansion, actively responding to the "Belt and Road" initiative, the company has strategically positioned itself in Saudi Arabia with a 500,000 ton electrolytic aluminum integrated project, injecting new growth momentum into the overseas market. It is understood that according to CRU's report, from 2025 to 2028, the demand for electrolytic aluminum in the Middle East region is expected to maintain a compound annual growth rate of about 4.6%. By entering this high-growth market, the company will not only benefit fully from regional development dividends but also diversify geopolitical and single market risks through global capacity deployment, enhancing operational stability. On the other hand, Saudi Arabia, with its abundant oil and gas resources, can provide low-cost and stable electricity support for aluminum production. Data shows that the average industrial electricity cost in Saudi Arabia is much lower than that of industrial electricity during non-peak hours domestically, giving the project a significant energy cost advantage. The company is expected to replicate and strengthen its energy cost competitiveness domestically through this and accelerate the construction of global competitive barriers. Overall, it has become a rare target that combines "certainty" and "growth". On the one hand, the company has built a solid foundation with its deep integrated layout and leading cost advantages, with multiple financial indicators continuously improving and high profitability certainty; on the other hand, the overseas layout has opened up a clear second growth curve for the company, breaking through the ceiling of long-term valuation improvement. With the company expected to continue benefiting from the high prosperity of the global electrolytic aluminum market, it has become an extremely valuable investment target for long-term configuration.