Wayne Fung, an analyst from CMB International Securities, maintained the Buy rating on China Hongqiao Group Ltd.. The associated price target was raised to HK$45.00.
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Wayne Fung has given his Buy rating due to a combination of factors tied to a structurally tight aluminium market and improved earnings outlook. His sector work indicates that global aluminium will likely remain in deficit through 2026 and stay tight into 2027, as China is already operating close to its policy capacity limit and there is only modest new capacity expected outside China. Against this backdrop, he has raised his aluminium price assumptions for 2026-27 while lowering his bauxite cost forecasts, which together translate into a sizeable upgrade to Hongqiao’s projected profits in those years.
Wayne now expects a strong acceleration in net profit growth in 2026, and he has lifted his target price to HK$45, applying an 11x 2026 P/E multiple that reflects both historical valuation norms and a premium for the supply-driven upcycle. He also highlights that the stock’s performance is likely to be anchored more by earnings growth than by multiple expansion, given the historical ceiling of around 10–11x forward P/E. Sensitivity analysis further underscores Hongqiao’s leverage to higher aluminium prices, supporting the investment case despite well-flagged risks such as potential changes to China’s capacity cap, faster overseas capacity additions, macro slowdown, or a spike in input costs. Overall, these drivers lead him to reiterate a positive stance and maintain a Buy recommendation on the shares.
According to TipRanks, Fung is ranked #1507 out of 11984 analysts.
In another report released on January 29, TipRanks – PerPlexity also upgraded the stock to a Buy with a HK$47.00 price target.