Hongqiao Holdings’ net profit came in at RMB15.6bn (up 77% YoY) in 1H26, in line with the profit alert announced in Jul. The results imply 1.2x YoY growth of net profit in 2Q26. The earnings growth in 1H26 was much higher than that of China Hongqiao (1378 HK, BUY), as (1) Hongqiao Holdings’ expense growth was less than that of China Hongqiao, and (2) Hongqiao Holdings does not own bauxite asset (weak bauxite price in 1H26). We revise up our 2026E/27E/28E earnings forecasts by 7%/4%/4%, mainly due to lower minority interest assumptions, which offset the lower forecast on alumina profit. Our TP is slightly lowered to RMB28, based on 12x 2026E P/E, equivalent to unchanged 20% premium to our target multiple (10x) for China Hongqiao (previously RMB29, as we trimmed our target P/E of China Hongqiao).

Key risks: (1) unexpected removal of capacity cap in China; (2) faster-than-expected overseas capacity ramp-up for the industry as a whole; (3) slowdown of the global economy; (4) sharp increases in costs of input such as bauxite and coal.