DBS analyst Tina Hu maintained a Buy rating on China Hongqiao Group Ltd. (1378 – Research Report) on June 30 and set a price target of HK$22.00.
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Tina Hu’s rating is based on China Hongqiao Group Ltd.’s robust position as a leading player in the aluminium industry, with a significant share of production capacity both in China and globally. The company’s integrated value chain, which includes secured overseas bauxite supply and the use of hydropower, provides a stable cost structure and growth potential. Additionally, the relocation of aluminium capacity to Yunnan has further optimized production costs and aligned with clean energy initiatives.
Tina Hu anticipates continued growth for China Hongqiao Group Ltd. due to strong price momentum and cost advantages. The company’s profitability has been bolstered by higher aluminium and alumina prices, alongside reduced raw material costs. Looking forward, the company’s efforts to enhance production efficiency and explore downstream opportunities for high-value aluminium alloy products are expected to sustain earnings growth. The anticipated increase in bauxite and alumina prices further supports the Buy rating, with a target price set at HKD18.
In another report released on June 25, HSBC also maintained a Buy rating on the stock with a HK$18.50 price target.
1378’s price has also changed dramatically for the past six months – from HK$11.600 to HK$17.980, which is a 55.00% increase.