China Hongqiao Group - Superior cost advantage from an integrated value chain

Upgrade to BUY, TP raised to HKD13.9, based on 1.1x FY25F P/B against 19.5% ROE in FY25F. World’s top player with 8% of global capacity, equipped with an integrated value chain with secured overseas bauxite supply. Earnings to remain elevated from FY24-26F on strong aluminium prices due to supply constraints and cost advantages from cheap hydropower. Trading attractively at 0.9x forward P/BV and 4.8x forward P/E, with a high dividend yield of c.10%.