"Aluminum King" returns with dividend payout: Hongqiao Holdings' first year of restructuring sees simultaneous growth in revenue and profit, with substantial dividends to reward investors

Ask AI · Why Hongqiao Holdings is giving a big dividend in the first year of the restructuring—close to 90% of profits

After completing a major asset restructuring worth over 60 billion yuan, Hongqiao Holdings (002379.SZ) has recently formally cemented its “aluminum king” status with a solid annual report. In 2025, the company saw growth in both operating revenue and net profit, and the special dividend plan disclosed alongside the annual report has become a focus for the market. Hongqiao Holdings launched a special dividend plan, proposing to distribute cash dividends of 3.26B yuan, accounting for nearly 90% of the distributable profits of the parent company.

As one of the world’s largest primary aluminum production companies, Hongqiao Holdings benefits from a scale advantage, with annual production of over 20 million tons of alumina and over 6.5 million tons of electrolytic aluminum. Currently, the company is accelerating the transfer of electrolytic aluminum capacity to Yunnan, a region enriched in hydropower resources. It is expected that the share of hydropower-based aluminum will further increase in the future. Against the backdrop of a tight industry supply-demand balance and the possibility of an upward move in the aluminum price center, the company stands to benefit fully.

3.26B yuan special dividend—nearly 90% of profits returned to shareholders

This dividend arrangement by Hongqiao Holdings has become one of the most market-attended highlights in the annual report. According to the company’s disclosure of its 2025 profit distribution proposal, it plans to distribute cash dividends of 2.5 yuan per 10 shares (tax included), totaling 3.26B yuan, representing 89.88% of the parent company’s distributable profits of 3.63B yuan.

The context behind this dividend move is worth digging into. Before the restructuring, Hongqiao Holdings’ predecessor, Hongchuang Holdings, had relatively weak sustained profitability due to its single aluminum processing business, so it had not paid any cash dividends for as long as 11 years. After the restructuring was completed, the company’s main business has transformed and upgraded into a “chain-leader” enterprise integrating alumina, electrolytic aluminum, and deep aluminum processing. Hongqiao Holdings has decided to implement this special dividend to reward the broad shareholders for their long-term support.

This big-spending dividend is based on the company’s expectations and confidence in future development after the restructuring, and it also signals that Hongqiao Holdings has entered a stage of stable cash returns, with dividend attributes that will significantly enhance its long-term investment value.

For its future dividend plans, the company said: “While ensuring operating safety, we will share operating results with all shareholders as much as possible. After the specific dividend methods and related dividend policies are determined, we will communicate with everyone in the future.”

Recently, affected by market sentiment fluctuations related to the Iran-U.S. war, Hongqiao Holdings’ share price has retreated somewhat from its peak. In the view of industry insiders, this is more an irrational capital outflow led by market panic sentiment. Fundamentally, the business remains stable. The stock price has risen steadily since early 2025 to a peak—up more than 2 times so far. The current pullback could become a new window for allocation.

From a valuation perspective, after Hongqiao Holdings completes its transformation from a single aluminum processing company into an integrated aluminum industry leader, multiple institutions have issued positive evaluations after the company released its annual report. According to WINS consensus forecasts, the company’s net profit attributable to shareholders will reach 31.86B yuan, 34.98B yuan, and 37.75B yuan in 2026-2028, respectively, with growth rates of 78.32%, 9.81%, and 7.92%. Corresponding to the current share price, the PE is approximately 11.38x, 10.37x, and 9.61x. Upon initial coverage, multiple institutions have given a “Buy” rating.

Revenue and profit both rise; the financial structure continues to improve

After the restructuring, in 2025 Hongqiao Holdings recorded growth in both operating revenue and net profit. In 2025, the company achieved operating revenue of 156.72B yuan, up 4.25%; net profit attributable to shareholders was 17.86B yuan, up 3.69%.

Meanwhile, the company’s financial condition further improved, with abundant cash flow. Hongqiao Holdings’ net cash flow from operating activities reached 24B yuan. Selling expenses and financial expenses decreased year over year, indicating that after completing large-scale acquisitions, the company effectively controlled its leverage ratio. This reflects its strong capital operation capabilities and a prudent financial strategy.

In 2025, the company produced 20.1378 million tons of alumina and 6.5450 million tons of electrolytic aluminum, making it one of the world’s largest electrolytic aluminum producers. More importantly, the company has built a full industrial chain layout from alumina, electrolytic aluminum, to deep aluminum processing. Its raw material, alumina, is highly self-supplied, mitigating the risk of upstream price volatility.

Currently, the company is stepping up the transfer of electrolytic aluminum capacity to Yunnan’s hydropower-rich region, which will help further reduce costs. By the end of 2025, Hongqiao Holdings had already commissioned about 2.18M tons of electrolytic aluminum capacity in Yunnan. By the end of next year, Hongqiao Holdings plans for total electrolytic aluminum planned capacity at its Yunnan base to be about 3 million tons.

At the technological level, the company has the world’s first full-series 600kA very large-scale prebaked anode electrolytic cells. To date, it remains one of the largest aluminum production series in the world in terms of large-capacity industrialized applications. All electrolytic cells use large-scale prebaked anodes of 400kA or above, placing the company at the industry leading level in terms of energy consumption, emissions, and the degree of intelligent operation.

These advantages are being converted into market competitiveness and profit resilience. In 2025, Hongqiao Holdings, leveraging its industry-leading position and pricing power, kept its overall gross margin stable. In its 2025 annual report, the company stated that the integrated industrial chain layout provides strong assurance to cope with fluctuations in raw material prices.

The tight industry balance continues; the aluminum price center may rise

Looking across the industry, the supply-demand tight balance in the aluminum market continues to persist, providing strong support for Hongqiao Holdings’ performance.

China is the world’s most important country for electrolytic aluminum production. China’s electrolytic aluminum output accounts for more than 50% of global output. According to data from Antaike, as of the end of 2025, China’s built electrolytic aluminum capacity was 44.83 million tons per year, which has gradually approached the industry’s “capacity ceiling.” It is expected that in the future, domestic electrolytic aluminum output will gradually stabilize at around 45 million tons. In 2025, electrolytic aluminum production was 44.23 million tons, which is about 2.11M tons lower than consumption.

Especially now, as AI computing power demand accelerates and power becomes a battleground, training and inference for AI large models require massive computing power. The core operating costs of computing power centers are also electricity. The stability of electricity supply and cost advantages are becoming key variables restricting actual output and profitability. Over the long term, the global overseas electricity cost center for the electrolytic aluminum industry is expected to keep moving upward.

On the demand side in emerging areas, electrolytic aluminum shows a diversified pattern. Under the trend of lightweighting in new energy vehicles, the amount of aluminum used per vehicle continues to rise. In terms of photovoltaic installations, demand for components such as aluminum frames and aluminum brackets is strong. In addition, continuous pull from high-end manufacturing fields such as ultra-high-voltage power grid construction, energy storage equipment, and aerospace is also boosting aluminum demand. According to Antaike’s forecast, although demand in traditional sectors such as real estate will shrink, due to stable growth drivers in emerging industries, a domestic supply gap in the electrolytic aluminum market will continue to exist. The tight supply-demand balance will be maintained.

At the same time, overseas supply faces constraints due to geopolitical conflicts. The Middle East is an important electrolytic aluminum production base globally. Since the intensification of geopolitical conflicts from the end of 2025, major aluminum plants in the Middle East have successively encountered production interruptions, and multiple locations have announced shutdowns and reduced production. Electrolytic aluminum production has the characteristics of “easy to reduce, hard to resume.” Once electrolytic cells stop feeding, the comprehensive restart cycle is long and the restart cost is high, leading to an inability for Middle Eastern aluminum output to be made up in the short term. Moreover, due to geopolitical uncertainty, the subsequent restart process will be further delayed.

The company is relatively optimistic about the future of the industry. At a performance briefing on March 26, the company said that China’s electrolytic aluminum production capacity ceiling is 45 million tons, and supply incremental additions are limited. In 2025, China’s consumption growth rate of primary aluminum exceeded its supply growth rate. It is expected that primary aluminum consumption will continue to maintain a growth trend, and the aluminum price center may move higher.

In recent years, electrolytic aluminum prices have risen from about 18k yuan per ton at the beginning of 2024 to around 23k yuan per ton. Although there are short-term fluctuations driven by market sentiment, under the dual drivers of rigid supply constraints and structural demand growth, the long-term upward trend in the aluminum price center has not changed. In particular, with this round of supply affected by capacity damage in the Middle East, the aluminum price center is expected to continue to rise.

For Hongqiao Holdings, this means its core products will continue to operate in a favorable pricing environment. As one of the world’s largest electrolytic aluminum producers, the company has greater profit upside leverage during periods of aluminum price uptrends. At the same time, the company’s full industrial chain layout and cost advantages enable it to realize stronger profit growth more fully during industry boom cycles.