China Hongqiao's Margins Seem Supported by Likely Elevated Aluminum Prices
Dow Jones
Yesterday
0744 GMT - China Hongqiao's margin resilience could be supported by likely elevated aluminum prices amid persistent supply-demand tightness for the metal, says DBS Group Research in commentary. The Chinese aluminum company's 1H earnings rose 39% on year, in line with DBS's estimates, the analysts say. The company's vertically integrated supply chain provides stable, low-cost bauxite and alumina feedstock, which could enable it to maximize earnings from rising aluminum prices, say the analysts. They also expect China's capacity ceiling for aluminum to continue to enforce structural supply discipline in the country. DBS maintains its buy rating and target price of 45.00 Hong Kong dollars. Shares drop 1.3% to HK$23.58.
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