The Zhitong Finance App learned that J.P. Morgan Chase released a research report to give China Hongqiao (01378) an “increase in shares” rating. The target price is HK$30. In the first half of 2026, the net profit attributable to shareholders of China Hongqiao was about 17.21 billion yuan, an increase of about 39% over the previous year, in line with expectations.
J.P. Morgan has a positive view of China's Hongqiao. Key factors include:
The gross profit per ton of electrolytic aluminum reached a record high, driving strong profit growth
The gross profit per ton of electrolytic aluminum reached 8,100 yuan (+78% YoY, +43% month-on-month), and the comprehensive average sales price was 21,500 yuan/ton (+18% YoY, +10% month-on-month). Total gross profit increased to 27.5 billion yuan (+32% year over year, +33% month over month), and gross margin increased to 31.5% (up 5.8 percentage points year over year and 6.0 percentage points month over month). Electrolytic aluminum sales are generally stable, indicating that the increase in profits is mainly driven by profit margin expansion rather than sales growth.
Reduced interest costs and deleveraging have improved profit quality
Net interest expenses fell to 594 million yuan (-23% year over year, -59% month on month), and net debt fell to 17.2 billion yuan (-38% year over year, -10% month on month). The net leverage ratio improved to 12% (13% at the end of fiscal year 2025 and 24% in the first half of 2025).
Share repurchases continue to provide support
In the first half of 2026, China Hongqiao repurchased and cancelled 159.3 million shares, involving an amount of approximately HK$5.29 billion; at the same time, the controlling shareholders increased their holdings by 41.5 million shares during this period.