2025年上半年净利劲增35%+，中国宏桥股债齐涨 (ENG)

August 26—China Hongqiao Group Limited ("China Hongqiao", 01378.HK) released its 2025 interim results, reporting a robust year-on-year net profit increase of more than 35%. The results underscore the company's solid fundamentals and industry-leading position, presenting a strong set of financials to the capital market.

Amid a turbulent global economy and intensifying competition in the aluminum sector, this aluminum giant has achieved breakthroughs on both fronts—rapid earnings growth and outstanding ESG practices. By combining "green development" with "green economy," the company has reinforced the resilience of its fully integrated industrial chain, translating low-carbon transformation and inclusive development into tangible economic value. These initiatives have driven gains in both the company's stock and bond markets, showcasing a "triple win" across ecological, economic, and capital dimensions for global resource-based enterprises.

Performance Surge: Resilient Growth Across Cycles

In the first half of 2025, China Hongqiao delivered core financial results that surpassed expectations across the board: total revenue, gross profit, and net profit rose by 10.1%, 16.9%, and 35.4% year-on-year, respectively, with net profit attributable to shareholders increasing over 35.0%. Crucially, cash and cash equivalents grew 8.9% year-on-year to RMB 44.77 billion; basic earnings per share rose 36.0% to RMB 1.314, underscoring both shareholder returns and the company's operational stability amid industry cycle fluctuations.

Building on these results, China Hongqiao reaffirmed its commitment to enhancing shareholder returns with delivering stable full-year dividends. Although no interim dividend has been declared for H1 2025, the company pledged that the full-year payout ratio would not fall below the 2024 level, providing a firm floor for investor returns. In addition, the company a new share repurchase program with a minimum commitment of HKD 3 billion in open-market buybacks. All repurchased shares will be canceled, enhancing equity value and reinforcing investor confidence in long-term returns.

This exceptional performance stems from positive shifts in industry fundamentals. In H1 2025, the electrolytic aluminum sector experienced steady growth under the dual tailwinds of falling costs and resilient demand. Driven by surpluses in bauxite and alumina alongside lower energy prices, industry-wide full-cycle costs declined by approximately 4-5% year-on-year, while profitability increased over 68%. On the supply-demand front, tight market balances persisted: national primary aluminum production and consumption rose 2.4% and 4.3% year-on-year, respectively, laying a solid foundation for margin expansion. China Hongqiao's growth aligned precisely with rising aluminum prices and declining coking coal costs, while benefiting from its fully integrated industrial chain and technological innovation.

The surge in profitability was fueled by both technological innovation and product upgrades. Net profit growth of over 35% was driven not only by higher sales prices for aluminum alloy and alumina products, but also by steadily expanding sales volumes and an increasing proportion of high-end aluminum products, collectively unlocking substantial earnings potential.

China Hongqiao's unique competitiveness lies in the cost moat built through full-chain integration: (1)Upstream: stable bauxite supply from Guinea secures resource foundations; (2)Midstream: near 100% self-sufficiency in alumina and over 50% in power creates a closed-loop cost control system, widening its cost advantage over peers by 8%; (3)Downstream: the company experienced "volume-price synergy"—aluminum alloy sales rose 2.4% to 2.906 million tons, with average prices up 2.7% to RMB 17,853/ton; alumina sales jumped 15.6% to 6.368 million tons, with average prices up 10.3% to RMB 3,243/ton; and aluminum alloy processed products grew 3.5% to 392,000 tons, with prices up 2.9% to RMB 20,615/ton. Its model of securing upstream supply, controlling midstream costs, and driving downstream efficiency enhances cost advantages, strengthens market influence, and builds a competitive moat that rivals find hard to replicate.

ESG Leadership: From Sustainable Practices to a Global Benchmark

In 2025, China Hongqiao's ESG initiatives delivered substantial results—from breakthroughs in globally leading low-carbon aluminum technology to establishing full-chain circular economy systems spanning "mining to recycling." By advancing ecological civilization through regional industrial clusters and environmentally friendly overseas projects, the company earned wide recognition from authoritative institutions both at home and abroad.

Global Recognition: Elevated ESG Ratings and Awards

China Hongqiao achieved major ESG rating improvements: MSCI ESG upgraded from "B" to "BB," ranking second globally in aluminum and first domestically; WIND ESG rating climbed from "BBB" to "AA," ranking 12th in the "Other Metals & Mining" sector, setting a new industry benchmark. The company also received multiple honors, including recognition by Xinhua News Agency as an "Excellent Case in New Quality Productive Forces," the "Global Impact Award" from SIM-PAC, and selection as the only aluminum enterprise named in the "Best Companies Asia-Pacific 2025" list by Time magazine and Statista, positioning it among the region's top 500 enterprises by overall strength.

Its subsidiary Hongfa Aluminum received China's first product evaluation certificate for resource recycling in the aluminum deep-processing industry, and its 11 subsidiaries obtained certification under the Aluminum Stewardship Initiative (ASI) Chain of Custody standard, reflecting a steadfast commitment to responsible management across the entire value chain. The Group has been invited to the UNFCCC COP for four consecutive years, openly sharing its ecological-first green development path and contributing "Hongqiao insights" to global sustainability.

Green Finance Innovation Driving Sustainability

Building on its ESG strategy, China Hongqiao has pioneered a green finance engine, issuing green bonds to propel sustainable development. Focused on photovoltaic power and recycled aluminum industry upgrades, the company allocated financial resources to advance the circular economy.

In 2025, Shandong Hongqiao successfully issued multiple green and sci-tech innovation bonds, including the "25 Lu Hongqiao GN002/003" bonds with a rural revitalization theme. These instruments integrated green, innovation, and rural development objectives, aligning precisely with clean energy projects, technological upgrades, and livelihood improvements. Raised funds are allocated to 28 photovoltaic projects in Luxi County, with a total investment of RMB 14.52 billion.

Deepening ESG Transition: Tech-Driven Low-Carbon Development

In green development, the Group has led industry transformation with upgraded energy structures and demonstration projects. It developed an integrated "wind-solar-hydro energy storage" system, significantly increasing clean energy usage. The Yunnan Green Aluminum Innovation Industrial Park accounts for over 20% of capacity and achieves a 100% in-situ conversion rate of molten aluminum metal, reducing carbon emissions associated with ingot casting, downstream casting, and transportation.

In circular economy initiatives, the Shandong Hongshun Recycling Technology Industrial Park upgraded recycled aluminum processes, reducing energy consumption per ton by 95% and carbon emissions intensity by over 85%. Recycled aluminum capacity and automotive dismantling scale lead nationwide, progressing toward the "largest recycled aluminum circular base in China." Core segments including thermal power, alumina, and electrolytic aluminum achieved ultra-low emissions.

Technological innovation drives low-carbon development: the "Intelligent Aluminum AI&L model R&D project" applies AI for intelligent control in electrolytic aluminum, establishing a new low-carbon production benchmark. In automotive light weighting, six proprietary high-strength, high-toughness, high-serviceability aluminum alloys reduced component weight by 20%-40% and decreased life-cycle carbon emissions by over 10%, supporting the green transition of new energy vehicles.

Looking ahead, China Hongqiao will continue to build the "Aluminum Innovation Platform" with upstream and downstream partners, leveraging scale and resources to enhance industry-wide innovation.

Capital Market Impact: Dual Gains in Share and Bond

In global capital markets, China Hongqiao leveraged its "strong performance + ESG soft power" to achieve simultaneous stock and bond gains.

Year-to-date, the share price surged from HKD 10.4 to HKD 24.6, a 137% increase, doubling market value to over HKD 230 billion. This gain led the aluminum sector and stood out in the Hong Kong capital market.

The bond market has sent similarly positive signals. Two offshore senior bonds continue to trade above 100, while domestic green and sci-tech innovation bonds reached historic low issuance rates. The company's "AAA" credit rating combined with ESG premium has attracted global capital interest.

Looking ahead to H2 2025, the aluminum industry's tight supply-demand balance is expected to continue, with operational capacity likely to exceed 43 million tons while emerging industry demand remaining robust. Coupled with low inventory levels, supportive policies, overseas monetary easing, and easing trade tensions, there is high confidence that aluminum prices will maintain a steady upward trajectory over the next two years.

In this favorable industry environment, China Hongqiao is well-positioned to maintain its market leadership. Leveraging its fully integrated industrial chain, advanced production capabilities, and commitment to green development, the company is set to capture the full benefits of sector growth. Moving forward, China Hongqiao will not only sustain strong financial performance but also serve as a global benchmark for sustainable aluminum production, driving innovation, efficiency, and environmental responsibility across the industry.