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China Hongqiao (01378): Introducing strategic investors to Shandong Hongtuo received a capital increase of 2,962.6 billion yuan

Zhitong Finance App, China Hongqiao (01378) issued an announcement. In order to further expand the company's shareholder base and introduce strategic investors, the company's non-wholly-owned subsidiaries Weiqiao Aluminum, Shandong Hongtuo, and Shandong Hongqiao have successively signed separate capital increase agreements with various investors on the date of the agreement. As of December 21, 2023, Tianjin Juxin, Jinan Jiahui, China Huarong, Jinan Junyue, Ningbo Xinlu, Jinan Hongtai, and Tianzin Chengcheng all agreed to spend 500 million yuan, 530 million yuan, 500 million yuan, 5.2 billion yuan, and 5.2 billion yuan respectively $400 million, $301 million, and Shandong Hongtuo New Capital was purchased at a consideration of 30 million yuan (total cumulative consideration was 2,962.6 billion yuan). The subsidiary Shandong Hongqiao achieved revenue of 97.866 billion yuan and net profit of 6.525 billion yuan in the first nine months of this year. Among them, the net profit of Shandong Hongqiao in the Q3 single quarter increased by 226.2% compared to the same period last year, and the month-on-month increase also reached 167.9%, a rapid increase.

Comment: Introducing investors as strategic shareholders of Shandong Hongtuo will help to further deepen cooperation with strategic investors and facilitate the long-term development of the Group. The impressive profit performance is due to the layout of the entire industry chain and the extremely high electricity self-sufficiency rate. The ratio of the company's own electricity is about 55%, of which 63% in Shandong is its own electricity. It has a significant advantage on the cost side, so even when the price of a ton of aluminum is relatively low, the company still has a higher net profit margin.

Notably, the profitability of both aluminum and alumina improved in the third quarter of '23. The cessation of aluminum electrolytic production in Yunnan may bring uncertainty to the supply side of the industry. In December, the removal of aluminum ingots to storage began to gradually accelerate. There was also a marked increase in aluminum export data in November, and aluminum prices entered a period of recovery. In terms of production capacity, the company has a domestic alumina production capacity of 17.5 million tons plus Indonesia's 2 million tons of alumina production capacity. Currently, the production capacity of electrolytic aluminum is mainly located in Shandong. The medium- to long-term plan is to transfer 3.96 million tons of production capacity to Yunnan. Of these, Wenshan Phase 1, 1 million tons has been put into operation in 2022, and Phase II is progressing in an orderly manner depending on the situation. Furthermore, the initial plan to relocate 1.93 million tons of production capacity to Honghe, Yunnan has been listed as a demonstration project for a local green and low-carbon demonstration industrial park. After the overall relocation of the above projects is completed, Hongqiao will transfer a total of 3.96 million tons of production capacity to Yunnan (accounting for about 2/3 of the total production capacity). The company has steadily resumed production during the Yunnan Fengshui period. It has now reached 1.24 million tons, and continues to promote electrification of the remaining production capacity in Phase 2.

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Yidu Technology (02158): Jointly launched smart medical solutions with Huawei, the medical domain model was officially released

The Zhitong Finance App learned that on December 21, 2023, the “2023 Medical Intelligence Conference” hosted by Yidu Technology (02158) and co-organized by Huawei will be held in Beijing. At the conference, Yidu Technology and Huawei signed a deepening cooperation agreement and jointly launched smart medical solutions to accelerate the intelligent transformation of the healthcare industry. In the first half of fiscal year 2024, the company's gross margin reached 38.2%, an increase of 12.1 percentage points over the previous year, a record high for the same period, and profitability increased significantly.

Comment: Signing a deepening cooperation agreement with Huawei will further enhance the company's competitiveness. At the conference, the large-scale medical domain model independently developed by Yidu Technology was officially unveiled. This is the first professional language model for multiple scenarios in the vertical medical field in China. It has now completed model training with 7 billion and 13 billion parameters, and is currently undergoing model training with 70 billion parameters. The number of diseases covered by Yidu Technology's “medical intelligent brain” yiduCore medical knowledge map has already exceeded 10,000 types of diseases, and disease models have been established in more than 70 disease fields. This means that the company's medical scenario solutions have also ushered in a comprehensive upgrade.

Increased product standardization of the company's medium- to long-term big data platform solutions and improved human efficiency of life science solutions are expected to drive up gross margin. Earlier, at the Huawei Full Connectivity Conference 2023, Yidu Technology teamed up with Shengteng AI to launch a large-scale model training all-in-one solution that can be used right out of the box. It is one of the achievements of Yidu Technology and Huawei's implementation of the big model in the medical field. The big medical model created by Yidu Technology can be efficiently adapted to Shengteng AI. According to the company's disclosure, Yidu Technology won a bid for a project to build a “clinical trial institution evaluation data platform”. The project aims to enhance the capabilities and standardization of clinical trial institutions and achieve hierarchical management and intelligent supervision of clinical trial institutions. At the same time, Ningbo Century Kangtai Insurance Brokers Co., Ltd., an affiliate of the company, won the bid for the Shenzhen Welfare Insurance Project third-party platform project as the lead unit of the consortium.

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