CITIC International raised the target price of CHINAHONGQIAO to 45 yuan, expecting profits to be driven by rising aluminum prices

CMB International maintains a positive outlook on CHINAHONGQIAO (01378.HK) as it expects a continued supply-demand imbalance in the global aluminum market from 2026 to 2027. The bank has raised its average aluminum price forecasts for the same period by 12% and 7%, respectively, while lowering its bauxite price forecasts by 16% and 18% due to ample supply. As a result, it has increased its earnings forecasts for CHINAHONGQIAO for the next two years by 27% and 12%, respectively, raising the target price from HKD 39 to HKD 45, and maintaining a "Buy" rating.

The bank expects the company's core net profit to reach RMB 26.2 billion in 2025, a year-on-year increase of 7%, and anticipates that net profit growth will accelerate to 34% in 2026, based on higher aluminum prices. In terms of earnings sensitivity, the bank estimates that for every 1% increase in aluminum prices, the company's earnings in 2026 will increase by approximately 2.3%; while a 1% decrease in coal prices will boost earnings by about 0.3%