External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>On the back of (1) almost full utilisation rate of aluminium capacity in China along with slow capacity ramp-up in overseas, (2) resilient end-demand such as EV, power and electronics, and (3) relatively stable raw materials costs, Hongqiao is at sweet spot and is set for further re-rating.</li><li>We revise up our 2025E-27E earnings forecasts by 4-5%, largely due to higher aluminium price fuelled by favourable supply/demand profile.</li><li>We revise up our TP to HK$39 (from HK$27), based on 12x P/E (previously 8.6x) which is derived from 2SD above the historical average. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

On the back of (1) almost full utilisation rate of aluminium capacity in China along with slow capacity ramp-up in overseas, (2) resilient end-demand such as EV, power and electronics, and (3) relatively stable raw materials costs, Hongqiao is at sweet spot and is set for further re-rating.We revise up our 2025E-27E earnings forecasts by 4-5%, largely due to higher aluminium price fuelled by favourable supply/demand profile.We revise up our TP to HK$39 (from HK$27), based on 12x P/E (previously 8.6x) which is derived from 2SD above the historical average. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Hongqiao (1378 HK) - Further re-rating is possible

<ul><li>Hongqiao’s net profit came in at RMB12.3bn (+35% YoY) in 1H25, which is in line with the pre-announced profit in Jun.</li><li>Excluding the fair value loss of convertible bonds (CB), core net profit in 1H25 would reach RMB14.9bn (+42% YoY).</li><li>While we are a bit surprised that Hongqiao did not propose interim dividends (a change from the practice of interim distribution for many years), it put out a new share buyback scheme with a minimum spending of HK$3bn, which reflects management’s confidence and helps offset the potential dilution of CB conversion, in our view.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hongqiao’s net profit came in at RMB12.3bn (+35% YoY) in 1H25, which is in line with the pre-announced profit in Jun.Excluding the fair value loss of convertible bonds (CB), core net profit in 1H25 would reach RMB14.9bn (+42% YoY).While we are a bit surprised that Hongqiao did not propose interim dividends (a change from the practice of interim distribution for many years), it put out a new share buyback scheme with a minimum spending of HK$3bn, which reflects management’s confidence and helps offset the potential dilution of CB conversion, in our view.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Hongqiao (1378 HK) - Lack of Interim Dividends but New Buyback Scheme to Boost Confidence

<ul><li>Hongqiao’s net profit came in at RMB22.3bn (+95% YoY), which is in line with the pre-announced profit growth of 95% in Dec 2024.</li><li>This implies 47% net profit growth in 2H24. Excluding the fair value loss of convertible bonds (CB), the core net profit in 2024 would reach RMB24.5bn (+114% YoY).</li><li>Hongqiao proposed final dividends of HK$1.02/share. T</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hongqiao’s net profit came in at RMB22.3bn (+95% YoY), which is in line with the pre-announced profit growth of 95% in Dec 2024.This implies 47% net profit growth in 2H24. Excluding the fair value loss of convertible bonds (CB), the core net profit in 2024 would reach RMB24.5bn (+114% YoY).Hongqiao proposed final dividends of HK$1.02/share. TContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Hongqiao (1378 HK) - Net Profit in 2024 +95% in Line

<ul><li>We believe aluminum (Al) is one of the sectors that is highly sensitive to the launch of the series of forceful pro-market policies in China.</li><li>This, together with the weakness of dollar as a results of the start of rate-cut cycle in the US and a relatively limited new supply of Al, will likely boost the near-term Al price which will serve as key catalyst of Hongqiao.</li><li>We revise up our 2024E-26E earnings forecast by 9-12%, largely due to higher price assumption of Al and alumina. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We believe aluminum (Al) is one of the sectors that is highly sensitive to the launch of the series of forceful pro-market policies in China.This, together with the weakness of dollar as a results of the start of rate-cut cycle in the US and a relatively limited new supply of Al, will likely boost the near-term Al price which will serve as key catalyst of Hongqiao.We revise up our 2024E-26E earnings forecast by 9-12%, largely due to higher price assumption of Al and alumina. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Hongqiao (1378 HK) - Expect Higher ASP Following China’s Stimulus

<ul><li>Hongqiao’s net profit came in at RMB9.16bn (+2.7x YoY), which is better than the pre-announced profit growth of 2.2x in Jun.</li><li>Excluding the fair value loss of convertible bonds (CB), the core net profit would be even higher at RMB10.5bn (+3.3x YoY).</li><li>The strong profit growth was driven by higher-than-expected unit gross margin expansion for both aluminum (Al) (+2x YoY to RMB4,277/t) and Alumina (+2.3x to RMB748/t).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hongqiao’s net profit came in at RMB9.16bn (+2.7x YoY), which is better than the pre-announced profit growth of 2.2x in Jun.Excluding the fair value loss of convertible bonds (CB), the core net profit would be even higher at RMB10.5bn (+3.3x YoY).The strong profit growth was driven by higher-than-expected unit gross margin expansion for both aluminum (Al) (+2x YoY to RMB4,277/t) and Alumina (+2.3x to RMB748/t).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Hongqiao (1378 HK) - Net Profit 1H24 +2.7x YoY, Beat Expectations

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)