Adjusted Profit Surpasses ¥26 Billion, Beating Expectations
China Hongqiao reported a strong financial performance for its 2025 fiscal year, with revenue climbing 3.96% to 162.354 billion yuan. While reported net profit attributable to shareholders grew a modest 1.18% to 22.636 billion yuan, this figure was impacted by a 3.782 billion yuan non-cash loss from the fair value change of financial instruments. After adjusting for this item, the company's core net profit reached over 26 billion yuan, a result that surpassed analyst expectations and demonstrated underlying earnings power. In a sign of confidence, the company has recommended a dividend of 1.65 HKD per share.
Operating Cash Flow Climbs 14.75% as Capex Declines
The company's operational efficiency and financial discipline were key highlights of the report. Operating net cash flow saw a substantial increase of 14.75% to 38.995 billion yuan. This improvement came as the company reduced its capital expenditures to 10.657 billion yuan in 2025, down from 12.609 billion yuan in the prior year. This combination of rising cash generation and lower spending strengthened the balance sheet, with the asset-liability ratio declining 5.99 percentage points to 42.25%. Western Securities analysts noted that this trend positions China Hongqiao for even more abundant cash flow in the future.
Western Securities Reaffirms 'Buy' on Strong Segment Margins
Following the robust results, Western Securities maintained its 'Buy' rating on China Hongqiao. The firm's confidence is supported by strong performance across key business segments. The core aluminum alloy division saw its gross margin expand by 3.9 percentage points to 28.5%, contributing 106.1 billion yuan in revenue. The alumina segment also performed well, with sales volume growing 22.7% and contributing 38.83 billion yuan in revenue at a gross margin of 22.2%. The positive outlook is reflected in Western Securities' earnings per share (EPS) forecasts for 2026, 2027, and 2028 at 3.24, 3.50, and 3.78 yuan, respectively.
