Global Materials | Industrials | Commodities

Rahul Jain

Equity Bottom-Up

<ul>
<li>Equity placing strengthens Hongqiao’s balance sheet, cuts refinancing risk, and supports Yunnan’s low-carbon capacity migration.</li>
<li>FY25–27 forecasts updated: modest EPS dilution offset by lower interest costs and improved cash generation.</li>
<li>Valuation remains discounted vs global peers despite first-quartile costs, rising renewable mix, and improving aluminium market fundamentals.</li>
</ul>


Equity placing strengthens Hongqiao’s balance sheet, cuts refinancing risk, and supports Yunnan’s low-carbon capacity migration.
FY25–27 forecasts updated: modest EPS dilution offset by lower interest costs and improved cash generation.
Valuation remains discounted vs global peers despite first-quartile costs, rising renewable mix, and improving aluminium market fundamentals.


China Hongqiao: Capital Raise De-Risks the Balance Sheet Into a Strengthening Aluminium Cycle

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-hongqiao-group-ltd" target="_blank" data-smartkarma-citation="entities:1909:1" rel="noopener">China Hongqiao (1378 HK)</a> is looking to raise US$1.2bn via a top-up placement at an indicative price of HK$29.2/share, a 9.6% discount from the last close.</li>
<li>There will be limited passive buying from global index trackers at the time of settlement of the placement shares. However, there are a couple of potential index inclusions in December.</li>
<li>Then there will be more passive buying from trackers of a global index, <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> and <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> next year.</li>
</ul>



China Hongqiao (1378 HK) is looking to raise US$1.2bn via a top-up placement at an indicative price of HK$29.2/share, a 9.6% discount from the last close.
There will be limited passive buying from global index trackers at the time of settlement of the placement shares. However, there are a couple of potential index inclusions in December.
Then there will be more passive buying from trackers of a global index, Hang Seng Index (HSI INDEX) and Hang Seng China Enterprises Index (HSCEI INDEX) next year.


China Hongqiao (1378 HK): Index Impact of US$1.2bn Placement

APAC IPOs & Placements, Aequitas Research

Nicholas Tan

APAC IPOs & Placements

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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-hongqiao-group-ltd" target="_blank" data-smartkarma-citation="entities:1909:1" rel="noopener">China Hongqiao (1378 HK)</a> is looking to raise around US$1.2bn from a primary placement.</li>
<li>This represents 9.1 days of the stock’s three month ADV, and 2.9% of total shares outstanding.</li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>



China Hongqiao (1378 HK) is looking to raise around US$1.2bn from a primary placement.
This represents 9.1 days of the stock’s three month ADV, and 2.9% of total shares outstanding.
In this note, we will talk about the placement and run the deal through our ECM framework.


China Hongqiao Placement: Good Valuation but Likely Opportunistic, on the Back of Chuangxin Listing

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

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Quantitative Analysis

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Dec 19th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Xiaomi (1810 HK), Kuaishou (1024 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Xiaomi (1810 HK), Cosco Shipping (1919 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Dec 19th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Xiaomi (1810 HK), Kuaishou (1024 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Xiaomi (1810 HK), Cosco Shipping (1919 HK).


Hong Kong Buybacks Weekly (Dec 19th): Tencent, Xiaomi, Kuaishou

<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

China

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

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

China Hongqiao (1378 HK)

China Hongqiao: Capital Raise De-Risks the Balance Sheet Into a Strengthening Aluminium Cycle

Equity placing boosts Hongqiao's financial position, lowers refinancing risk, and backs Yunnan's green energy transition. Updated forecasts show...

Rahul Jain