Materials| Industrials |Commodities

Rahul Jain

Equity Bottom-Up

<ul>
<li>China Hongqiao has delivered steady ~6 Mt volumes, ~25% EBITDA CAGR, and 15–27% ROCE over the last three years, supported by integration and energy transition gains.</li>
<li>China Hongqiao is relocating 4 Mt of capacity to Yunnan to tap low-carbon hydropower, advancing its green aluminium transition.</li>
<li>China Hongqiao offers strong earnings visibility backed by low-cost operations, while trading at attractive valuations relative to peers.</li>
</ul>


China Hongqiao has delivered steady ~6 Mt volumes, ~25% EBITDA CAGR, and 15–27% ROCE over the last three years, supported by integration and energy transition gains.
China Hongqiao is relocating 4 Mt of capacity to Yunnan to tap low-carbon hydropower, advancing its green aluminium transition.
China Hongqiao offers strong earnings visibility backed by low-cost operations, while trading at attractive valuations relative to peers.


China Hongqiao (1378 HK): Leading the Low-Cost, Low-Carbon Aluminium Shift

Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

<ul>
<li>In today's Morning Views publication we comment on developments of the following high yield issuers: China Hongqiao, Softbank Group, Vedanta Resources, China Oil &amp; Gas, Biocon Biologics</li>
<li>In the US, new home sales jumped 7.4% m-o-m (1.3% e / 3.1% revised p) to an annualised 724 k units in March, driven by a surge in home sales in the South. The March (final) building permits rose 0.5% to an annualised 1.47 mn units.</li>
<li>Separately, the S&amp;P manufacturing PMI edged up to 50.7 (49.0 e / 50.2 p), while the services PMI fell to 51.4 (52.6 e / 54.4 p). The composite PMI declined to 51.2 (52.0 e / 53.5 p).</li>
</ul>


In today's Morning Views publication we comment on developments of the following high yield issuers: China Hongqiao, Softbank Group, Vedanta Resources, China Oil &amp; Gas, Biocon Biologics
In the US, new home sales jumped 7.4% m-o-m (1.3% e / 3.1% revised p) to an annualised 724 k units in March, driven by a surge in home sales in the South. The March (final) building permits rose 0.5% to an annualised 1.47 mn units.
Separately, the S&amp;P manufacturing PMI edged up to 50.7 (49.0 e / 50.2 p), while the services PMI fell to 51.4 (52.6 e / 54.4 p). The composite PMI declined to 51.2 (52.0 e / 53.5 p).


<ul>
<li>In today's Morning Views publication we comment on developments of the following high yield issuers: China Hongqiao, Adani Green Energy, Fosun International</li>
<li>In the US, the final services PMI for December 2024 edged up to 56.8 (56.1 p), while the composite PMI rose to 55.4 (54.9 p). Separately in November, factory orders declined 0.4% (-0.3% e / 0.5% revised p), and the final durable goods orders fell 1.2% (-0.5% e / -1.1% p).</li>
<li>Long-end treasury yields climbed, with the UST curve bear-steepening after a weak auction of 3Y notes and amid a large supply of US corporate bond issuances.</li>
</ul>


In today's Morning Views publication we comment on developments of the following high yield issuers: China Hongqiao, Adani Green Energy, Fosun International
In the US, the final services PMI for December 2024 edged up to 56.8 (56.1 p), while the composite PMI rose to 55.4 (54.9 p). Separately in November, factory orders declined 0.4% (-0.3% e / 0.5% revised p), and the final durable goods orders fell 1.2% (-0.5% e / -1.1% p).
Long-end treasury yields climbed, with the UST curve bear-steepening after a weak auction of 3Y notes and amid a large supply of US corporate bond issuances.


<ul>
<li>This morning, China Hongqiao held a roadshow to market USD benchmark-sized three-year RegS bonds.</li>
<li>The expected issuance size is USD 300-400 mn (capped at USD 400 mn).</li>
<li>The order book is reported at USD 2 bn (including USD 395 mn interest from the 15 joint global coordinators).</li>
</ul>


This morning, China Hongqiao held a roadshow to market USD benchmark-sized three-year RegS bonds.
The expected issuance size is USD 300-400 mn (capped at USD 400 mn).
The order book is reported at USD 2 bn (including USD 395 mn interest from the 15 joint global coordinators).


China Hongqiao - Event Flash - Roadshowing USD 3Y Regs Notes - Lucror Analytics

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Jun 13th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period.</li>
<li>We highlight short changes in Beke, Zijin Mining, Wuxi Apptec, AIA, Tencent, BYD, Li Auto.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Jun 13th.
Top short increases and decreases were tabulated for one week and four week period.
We highlight short changes in Beke, Zijin Mining, Wuxi Apptec, AIA, Tencent, BYD, Li Auto.


HK Short Interest Weekly: Beke, Zijin Mining, Wuxi Apptec, AIA, Tencent, BYD, Li Auto

China

China Hongqiao Group Ltd. manufactures aluminum products. The Company's aluminum products consist of molten aluminum alloy, aluminum alloy ingots and aluminum busbars.

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China Hongqiao (1378 HK)