Changes in Hong Kong stocks | China Hongqiao (01378) increased its increase by more than 8%. Expectations for the resumption of Middle East aluminum production weakened, and the company's profit momentum accelerated quarterly

The Zhitong Finance App learned that China's Hongqiao (01378) increased by more than 8%. As of press release, it had risen 8.1% to HK$23.2, with a turnover of HK$1,918 billion.

According to the news, recently, the situation in the Middle East changed abruptly, and the conflict between the US and Iran continues. Guoxin Futures believes that geographical risk has once again escalated, risk aversion in the market has escalated, the equity market has fallen sharply, and the US dollar has strengthened, putting pressure on the non-ferrous sector. At the same time, aluminum has shown a certain degree of resistance to decline due to the benefits brought by the return of part of the geographical risk premium. Chaos Tiancheng Futures said that considering that the Strait of Hormuz is expected to be re-blocked, expectations for the resumption of aluminum production in the Middle East have weakened, and aluminum prices are slightly supported. It is still necessary to observe subsequent geographical trends, such as continued blockade (after a period of navigation, if they want to re-trade and reduce production, they expect to see a hot war escalate to hit aluminum factories or the blockade time is long enough to cause a shortage of raw materials for trading), aluminum prices may be driven upward.

On the performance side, China's Hongqiao recently made a profit. Bank of America Securities indicated that the company's net profit is expected to increase by about 39% year-on-year in the first half of 2026, mainly driven by the rise in the average sales price of aluminum alloy. Based on the net profit for the first half of 2025 of about RMB 13.5 billion (same below), this guideline means net profit for the first half of 2026 is about RMB 18.8 billion. Assuming that net profit to mother maintains a similar year-on-year growth rate, it is estimated that net profit to mother for the first half of 2026 is about 17.2 billion yuan, which is roughly in line with the bank's expectations. Based on the bank's estimate of net profit of 7.7 billion yuan to 8 billion yuan for the first quarter of 2026, it is implied that net profit for the second quarter was 9.2 billion yuan to 9.5 billion yuan, an increase of about 20% from quarter to quarter, indicating that profit momentum accelerated from quarter to quarter.