Citibank: Raising the target price of China Hongqiao (01378) to HK$25.2 and is still the preferred stock for the aluminum industry

The Zhitong Finance App learned that Citi released a research report to maintain China's Hongqiao (01378) “buy” rating, raise the target price from HK$21.0 to HK$25.2, and continue to be listed as the preferred stock in the aluminum industry.

Citi said in the report that investors have always been concerned about aluminum demand in the second half of 2025 due to the slowdown in the solar industry and the arrival of the off-season. Despite a recent decline in actual aluminum consumption, aluminum prices are still strong, probably due to limited new supply. China's aluminum capacity utilization rate is already very high (98.5% in June 2025), while aluminum inventories are at a low level.

China's Hongqiao will benefit from higher aluminum profits, and its dividends are attractive, Citi said. The aluminum industry is Citi's most optimistic industry. Due to the capacity restriction policy, China's aluminum supply will continue to be tight, causing aluminum profits to remain at a high level for a longer period of time to come. Furthermore, China Hongqiao focuses on shareholder returns. By the close of trading on July 29, its dividend yield based on 2025 performance expectations was 8.1%, which is very attractive. Citi expects China's Hongqiao to benefit from higher aluminum profits, and its stock will also be revalued due to strong profits and generous dividends.