China Hongqiao H1 2026 Profit Jumps 39% on Strong Aluminum Prices

China Hongqiao Group (1378.HK), a leading global aluminum producer, reported a 39.2% year-over-year surge in net profit for the first half of 2026, driven by higher aluminum prices that boosted its core smelting business. According to a company filing, net profit attributable to shareholders reached 17.21 billion yuan for the period.

Performance Breakdown

The company's total revenue for the first six months of the year grew by 8.0% to 87.51 billion yuan. The significant profit increase was primarily fueled by its electrolytic aluminum division, where gross profit expanded by 8.8 billion yuan amid a favorable pricing environment.

This strong performance more than offset weakness in its alumina segment, which saw its gross profit decline by 4.9 billion yuan due to falling alumina prices. Operating cash flow remained relatively stable, contracting by just 0.7% to 22.15 billion yuan.

Analyst Commentary

Following the results, Guosen Securities maintained its "Outperform" rating on the company in a research note. The brokerage cited China Hongqiao's position as a global leader with a fully integrated industrial chain, including access to significant bauxite resources through an associate company.

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The analysts believe the company is capitalizing on the current high-price cycle for aluminum to reduce long-term debt and carbon emission pressures, positioning it for more sustainable future development.

Other Financial Highlights

China Hongqiao also reported several other key financial items and corporate actions during the period:

• Asset Impairments: The company recorded impairments totaling 1.1 billion yuan, consisting of a 580 million yuan write-down on fixed assets, mainly coal-fired power units, and a 530 million yuan provision for inventory due to lower alumina and bauxite prices.
• Financial Instruments: A gain of 950 million yuan was recognized from the fair value change of financial instruments, a reversal from a 2.1 billion yuan loss in the same period last year. The gain was linked to a valuation change in a derivative liability tied to a $300 million convertible bond.
• Shareholder Actions: The company repurchased and cancelled shares worth 5.29 billion Hong Kong dollars. Separately, its controlling shareholder increased their stake by purchasing shares for 1.1 billion Hong Kong dollars in early June.