Following the conclusion of April, major aluminum companies in the capital markets have disclosed their 2025 annual results. Based on available data, among globally listed primary aluminum producers, Hong Kong-listed CHINAHONGQIAO achieved a net profit of 22.64 billion yuan, ranking first worldwide in profit scale, solidifying its status as the global aluminum industry's profit leader. Although 2026 has just entered its fifth month, the global macroeconomic climate has been volatile, with geopolitical tensions intensifying compared to the previous year. Within this context, the aluminum industry's high prosperity has not been impacted by external factors. Instead, rigid constraints on the supply side appear to be worsening, and supply-demand imbalances are expected to persist. Furthermore, based on public information, CHINAHONGQIAO is highly likely to retain its position as the global aluminum industry's profit leader this year.

According to the recently disclosed 2026 first-quarter results from CHINAHONGQIAO's subsidiary, Shandong Hongqiao New Materials Co., Ltd., the subsidiary's Q1 revenue increased by 3.4% year-on-year to 41.552 billion yuan. More notably, the company's net profit surged by 30% year-on-year, despite a high comparative base. Given that Shandong Hongqiao is the core operating entity of CHINAHONGQIAO, holding all of its domestic operations, its performance can be viewed as a leading indicator for CHINAHONGQIAO's results. It is worth noting, however, that their performances are not entirely equivalent, as CHINAHONGQIAO also holds diversified overseas assets, including an alumina project in Indonesia, as well as bauxite and Simandou iron ore projects in Guinea, West Africa. Considering CHINAHONGQIAO's domestic and international assets, it is estimated that the company's Q1 net profit attributable to shareholders will fall within the range of 7.7 to 8.0 billion yuan, a performance expected to maintain its significant lead over global aluminum peers.

Although 2026 is not yet half over, it can aptly be described as an eventful year. Against a backdrop of persistent geopolitical tensions, aluminum prices exhibited strength and volatility in the first quarter, with an upward trend in the price center. Data shows that the average spot aluminum price in Q1 increased by 18% year-on-year and 12% quarter-on-quarter. During the quarter, the highest price exceeded 25,000 yuan per ton, while the lowest price remained above 23,000 yuan per ton. Specifically, in January, aluminum prices rose steadily, supported by monetary liquidity and a tight supply-demand balance. In February, prices experienced modest downward pressure and a slight retreat due to shifting expectations regarding U.S. Federal Reserve policy. By March, geopolitical conflicts in the Middle East captured global investor attention, shifting the pricing dynamics of major commodities, including aluminum, to be predominantly driven by geopolitical factors. Aluminum prices in March displayed a volatile pattern, characterized by an initial surge, followed by a decline, and then a subsequent rebound.

Within this industry environment of rising aluminum prices, Shandong Hongqiao, as the core domestic operating entity of CHINAHONGQIAO, leveraged its integrated operational layout and cost advantages to fully unleash its profit elasticity during this favorable period. As mentioned, in Q1 2026, Shandong Hongqiao achieved a net profit increase of over 30% year-on-year, despite only a modest revenue increase and a high profit base from the previous year. Under Hong Kong listing rules, quarterly reports are voluntary disclosures. Although CHINAHONGQIAO did not release a Q1 report, the strong profit growth trajectory of Shandong Hongqiao, combined with a reasonable estimate of profit contributions from CHINAHONGQIAO's diversified overseas assets, suggests that CHINAHONGQIAO's Q1 net profit attributable to shareholders will likely be in the range of 7.7 to 8.0 billion yuan. Compared horizontally with industry peers, this profit scale is expected to secure CHINAHONGQIAO's position as the global aluminum industry's profit leader for the year.

In secondary markets, investors often categorize aluminum companies like CHINAHONGQIAO as cyclical stocks, subsequently evaluating specific companies based on their growth and dividend attributes within this framework. However, as rigid supply-side constraints in the aluminum industry transition from "expectation" to "reality," and the degree of supply limitation intensifies, the profitability of aluminum companies is being effectively extended. Particularly for a world-class aluminum giant like CHINAHONGQIAO, with its integrated industrial chain and significant cost advantages, its cyclical nature has likely been substantially weakened. It increasingly resembles a value-growth stock possessing both prominent growth attributes and attractive dividend characteristics.

Regarding growth, it can be asserted that the primary aluminum industry has entered a new phase characterized by an extended profit duration. Domestically, a production capacity "ceiling" of 45 million tons is firmly in place. With operations running at full capacity, future capacity additions can only proceed through equivalent or reduced replacement, leaving extremely limited room for net increases in the coming years. If domestic supply constraints were anticipated, the impact of recent geopolitical conflicts on overseas aluminum supply has been both unexpected and more severe. According to a previous aluminum market analysis report from international investment bank J.P. Morgan, the global primary aluminum market is expected to face its largest supply deficit since the year 2000 in 2026.

While supply-side limitations appear certain, demand for aluminum demonstrates considerable resilience. The rapid development of emerging sectors such as energy storage, low-altitude aircraft, and robotics in recent years, along with the deepening trend of aluminum substituting for copper, continues to inject new incremental demand into aluminum consumption. Given the difficulty of constrained supply matching persistently growing demand, it is challenging to envision a realistic basis for a sustained decline in aluminum prices. Within this environment, CHINAHONGQIAO is poised to continue its sequential self-evolution by leveraging its integrated industrial chain advantages, and its growth momentum remains robust.

Concerning dividend attributes, information from CHINAHONGQIAO's 2025 results briefing indicates that from 2021 to 2025, the company's dividend payout ratios were 48%, 49%, 47%, 63%, and 65%, respectively, showing a clear upward trend in the payout ratio. In 2025, the company repurchased 306 million shares, amounting to 5.58 billion HKD. Both in terms of the magnitude and consistency of shareholder returns, CHINAHONGQIAO ranks at the top tier within the industry. More importantly, the fundamental capacity supporting CHINAHONGQIAO's sustained high dividends is being further strengthened. According to the financial reports of its subsidiary Shandong Hongqiao, the subsidiary's construction-in-progress balance has decreased significantly from nearly 17 billion yuan at the beginning of last year to approximately 6.3 billion yuan by the end of Q1 2026. This indicates that the peak period for project investment and construction has largely concluded, leading to a notable alleviation of capital expenditure pressure. As Shandong Hongqiao's capital expenditures recede, it is reasonable to infer that CHINAHONGQIAO's ability and willingness to pay dividends will continue to increase in tandem.

As the aluminum industry experiences an extended profit cycle, world-leading companies like CHINAHONGQIAO are expected to continue releasing their growth potential. Simultaneously, CHINAHONGQIAO's characteristics as a dividend asset are likely to strengthen further as its cyclicality weakens and its growth profile enhances. As China accelerates into an era of equity investment, CHINAHONGQIAO stands as a unique, globally competitive asset within the aluminum industry. Possessing high growth visibility, significant growth elasticity, and attractive dividends, it is poised to attract increasing attention from investors.