Guolian Minsheng Securities: Continuously high dividends to reward shareholders, maintaining a "recommended" rating on CHINAHONGQIAO (01378).

Guolian Minsheng Securities released a research report stating that the aluminum industry continues to be in a tight balance, with aluminum prices shifting upwards and the transformation to green energy assisting in long-term development. It is estimated that CHINAHONGQIAO (01378) will achieve a net profit attributable to the parent company of 36.85 billion yuan, 37.74 billion yuan, and 39.03 billion yuan for the years 2026-2028, respectively, with corresponding PE ratios of 8, 8, and 8 times the current price, maintaining a "recommended" rating. Key points from Guolian Minsheng Securities: Company's release of the 2025 annual report 1) Performance: In 2025, the company achieved revenue of 162.35 billion yuan, a year-on-year increase of 4.0%, and a net profit attributable to the parent of 22.64 billion yuan, a year-on-year increase of 1.2%; Revenue in 25H2 was 81.31 billion yuan, an increase of 0.3% quarter-on-quarter, with a net profit of 10.28 billion yuan; 2) Dividends: It is proposed to distribute dividends of 1.65 HK cents per share in 2025, with cash dividends of approximately 14.42 billion yuan, a dividend payout ratio of 63.7%, corresponding to a dividend yield of 4.8% based on the stock price on March 24. Electrolytic aluminum: Stable production and sales, profit improvement from rising aluminum prices 1) Quantity: The company's sales volume of electrolytic aluminum in 2025 was 5.824 million tons, basically the same year-on-year, with a sales volume of 2.918 million tons in 25H2, which was basically stable quarter-on-quarter; 2) Price: The price of aluminum in 2025 was 20,721 yuan/ton, a year-on-year increase of 4.0%, with the price of aluminum in 25Q4 being 21,534 yuan/ton, a quarter-on-quarter increase of 4.0%; 3) Cost & Profit: The production cost per ton of aluminum in 2025 was 13,000 yuan, with a gross profit per ton of 5,200 yuan, a year-on-year increase of 900 yuan. In 25H2, the production cost per ton of aluminum was 12,700 yuan, with a gross profit per ton of 5,900 yuan, a quarter-on-quarter increase of 1,400 yuan. Core points 1) Perfect integration layout of the industrial chain. The company's compliant electrolytic aluminum production capacity is 6.459 million tons, as of May 2025, with production capacity in Shandong at 4.971 million tons and in Yunnan at 1.488 million tons; alumina production capacity is 21 million tons, with domestic production capacity at 19 million tons and Indonesian production capacity at 2 million tons; the company's joint venture in the bauxite project in Guinea has a production capacity of 50 million tons, with the company holding a 22.5% stake, equivalent to an equity production capacity of 11.25 million tons. The company's integrated layout of bauxite, alumina, and electrolytic aluminum is well-established, with strong raw material security capabilities. 2) Transfer of electrolytic aluminum production capacity to Yunnan, green electricity assisting in long-term development. Since 2019, the company has begun to transfer electrolytic aluminum production capacity to Yunnan, where the power source is mainly hydroelectric, and under the dual carbon background, the premium on green aluminum is increasing, which is beneficial to the company's long-term development. 3) Investment in the Guinea iron ore project, horizontally expanding iron ore resources. The company's subsidiaries Weiqiao Aluminum and Winning Logistics each hold a 50% stake in WCH, and WCH indirectly owns the rights to develop and produce iron ore in blocks 1 and 2 of the West Mangdou iron ore project in Guinea. In the future, Weiqiao Aluminum is expected to enjoy corresponding returns on its investment in iron ore. Risk warning: Overseas additional production capacity exceeds expectations, delays in Yunnan electrolytic aluminum project, and aluminum demand falls below expectations.