Jinwu Financial News | Societe Generale Securities released a research report stating that market demand resilience in the first quarter of China's Hongqiao (01378) business exceeded expectations, driving aluminum prices to continue to rise. Benefiting from the decline in coal prices & anode & liquid alkali costs, both sides of the profit side of electrolytic aluminum tons continued to expand. In particular, Hongqiao, which accounts for a relatively high share of outsourced coal purchases, fully unleashed performance flexibility.
According to the bank, since April, aluminum prices have continued to rise above the 20,000 yuan level, and the cost side has continued to fall, and Q2 continued to be highly profitable. The bank estimates that the current net profit per ton of the Hongqiao Shandong division is around 3,700 yuan, and the net profit per ton of the Yunnan division is close to the level of 3,000 yuan. It will continue to release highly elastic performance in 24 years.
The bank predicts that the company's net profit for 24/25/26 is 202.73/204.36/20.560 billion yuan, respectively, +76.9%/+0.6% year-on-year, respectively. As of May 3, the company's 2024 forecast PE is 4.7x, PB0.92x, and a potential dividend rate of 10.5%, maintaining a “buy” rating.