• Buy Entry –8.15  Target –  9.64 Stop Loss – 7.29
  • China Hongqiao Group Limited, an investment holding company, manufactures and sells aluminium products in the People’s Republic of China and Indonesia. The company’s products include molten aluminium alloys, aluminium alloy ingots, aluminium busbars, and aluminium alloy processing products. It also engages in the research, development, and trading of bauxite; production and sale of electricity; and provision of financial leasing services.
  • Strength in aluminium prices. Aluminium futures remained close to $2,700 per tonne in the third week of December, after reaching a 7-week high at $2,724 in the previous week on worries over tight supplies. Several Chinese regions have cut energy-intensive aluminium production this year in the face of pressure to reduce power consumption to meet climate goals and ease electricity shortages. However, China’s aluminium output 35.45mn tonnes in the period from January to November was up 5.7% on the year, on course for an annual record.

Generic 1st Primary Aluminium (LA1 Comdty)

  • Outstanding 1H21 results. 1H21 revenue increased approximately 31.4% YoY to RMB 52,480,549,000, while profit increased approximately 200.4% to RMB8,423,717,000. The Board also declared an interim dividend for 2021 of HK45.0 cents per share, compared to the six months ended 30 June 2020 of HK15.0 cents.
  • Positive consensus estimates. According to Bloomberg consensus estimates, China Hongqiao  has ratings of 11 BUYS, 1 HOLD and 0 SELL, with a 12M target price of HK$13.51, representing an upside of 59.3% as of yesterday’s closing price.