To The Moon

China Hongqiao reported double digits growth in its 2025 interim report, with profits up by 35%.

The company announced a HKD 3 billion share repurchase but no interim dividend, which, combined with the repurchase, is less than last year's interim dividend.

Why is this the case?

I continued to delve into the interim financial report and found that capital expenditures increased by 80% during the period. These expenditures are mainly used for new project construction, such as the Yunnan Green Electricity Aluminum Innovation Base.

On one hand, China Hongqiao is adhering to carbon neutrality by increasing the use of green electricity. On the other hand, it is deepening its involvement in the aluminum industry chain, such as in emerging industries like integrated aluminum alloy die-casting for electric vehicle bodies. Electric vehicle manufacturing is becoming increasingly like mobile phone production, with many car companies only possessing design capabilities. Integrated aluminum alloy die-casting for car bodies is too difficult for these electric vehicle companies, as their strength lies in software design. China Hongqiao is filling this gap in their capabilities.

China Hongqiao is no longer just a simple aluminum material producer but rather an enterprise that integrates the upstream and downstream of the aluminum alloy industry chain. With increasingly cheaper green electricity in China, China Hongqiao's capital investments will yield substantial returns.

Note: Electrolytic aluminum is a method of producing aluminum, and cheap green electricity is an absolute advantage.

$CHINAHONGQIAO(01378)$