Changes in Hong Kong stocks | China's Hongqiao (01378) rose more than 5%, and Daimotsu has multiple cores to benefit Guinean bauxite exports to China, bringing cost advantages

The Zhitong Finance App learned that China's Hongqiao (01378) rose by more than 5%. As of press release, it had risen 5.05% to HK$18.93, with a turnover of HK$834 million.

According to the news, the Damo Research Report points out that China's Hongqiao has multiple core benefits: China's maximum production capacity of 45 million tons of electrolytic aluminum forms a hard constraint on domestic supply, compounded by potential supply disruptions in the southwest region, and the overall supply side of the industry is tight. China's Hongqiao has benefited from the relocation of production capacity, and electricity prices and coal costs have been optimized, effectively boosting corporate profit margins. The company opens up an integrated layout of the entire industry chain from upstream raw materials to downstream deep processing, and consolidates the basic profit market. Despite a certain increase in the stock price in the previous period, the company's current valuation still has allocation value, and dividend returns are also very attractive.

Citi, on the other hand, said that in recent years, Guinea has become an important source of imported bauxite from China. Citi pointed out that most of the increase in Guinea's bauxite production and export volume comes from the SMG/WAP project led by China's Hongqiao, the world's largest aluminum producer. As the project went into production, the real third-party bauxite market has shrunk. The bank believes that the actual “upstream integration” of Chinese smelting enterprises has reduced the demand for trade bauxite, so it has structurally lowered bauxite prices, which is beneficial to profit margins.