2025年利润同比增长33%；令人意外的股息

surprising dividend 2025 profit +33% YoY; surprising dividend Target PriceUp/DownsideCurrent Price Chuangxin’s net profit in 2025 grew 33% YoY to RMB2.73bn, which is 5% aboveour expectations but 2% belowBloombergconsensus.Chuangxin proposed afinal dividend of HK$0.77/shr, equivalent to ~54% payout, which is higher thanourexpectation.Meanwhile,Chuangxinannouncedtwoconnectedtransactions, including (1) the acquisition of the remaining 41.5% interest inShandong Chuangyuan (i.e. theexistingaluminarefinerybusiness unit)for aconsideration of RMB526mn, and (2)theacquisitionofacoal miningbusiness(RMB1bn). We think it makessense for Chuangxin toincreaseitsaluminaexposurefrom a long-term perspective(despite the down-cycle at the moment).However, we see the acquisition of coal miningbusinessas slightly negative, China MaterialsWayne FUNG, CFA(852) 3900 0826waynefung@cmbi.com.hk 2025 results highlights.Revenue grew 23% YoY to RMB18.7bn, driven by6%/139% YoY increase in aluminium / alumina &alumina hydroxide. Grossmarginfor aluminium business expanded3.3ppt YoY to 30.2%. Blendedgross margin narrowed 3.4ppt YoY to 24.8%, due to the higher growth oflow-margin alumina revenue (gross margin: 4.6%). Chuangxin reportedother loss of RMB116mn (vs gain of RMB18mn in 2024), dueto FX loss andloss on derecognition of financial liabilities. With the helpofpreferentialtax AcquisitionofShandongChuangyuanwill increasealuminaexposure.The consideration for the 41.5% stake is RMB526mn, which is equivalent toa total valuation(assuming 100% stake)of RMB1.27bn (implying ~4.7x2025 P/E).That said, the alumina segment should be loss-making at the Related reports: Production cut in Qatar to furtherincrease supply risks; +ve to aluminiumprice–4 Mar 2026 (link)Potential supply disruption in the MiddleEast will support the aluminium price–2Mar 2026 (link)Aluminium price to be fuelled by tightsupply throughout 2026–4 Feb 2026(link)Chuangxin Industries (2788 HK)-Capacity growth in Saudi Arabia +superb cost advantage on low greenenergy cost in China-4 Feb 2026 (link) Valuationnotattractivefor Tongliao Smart Mining (coal mining).Theconsideration (for 100% stake) is RMB1bn. Tongliao Smart Mining hasrecoverable reserves of 481mn tonnes, while the plannedannualproductioncapacity is 6mn. In 2025, Tongliao Smart Mining’s after-tax profit wasonly Key risks:(1)Unexpected removal of capacity cap in China; (2) volatility of aluminium andalumina prices; (3) power shortage; (4) supply chain disruption; (5)new project execution Disclosures& Disclaimers Analyst Certification Theresearch analyst who is primary responsible for the content of this research report, in whole or in part, certifies that withrespect to the securities or issuerthat the analyst covered in this report: (1) all of the views expressed accurately reflect hisor her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirmsthat neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to thedate of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4)have any financial interests in the Hong Kong listed companies covered in this report.CMBIGM or its affiliate(s) have investment banking relationship with the issuers covered in this report in preceding 12 months. Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong, Tel: (852) 3900 0888 Fax: (852) 3900 0800CMB InternationalGlobal MarketsLimited (“CMBIGM”) is a wholly owned subsidiary of CMB International Capital Corporation Limited (a wholly owned Important Disclosures There are risks involved in transacting in any securities. The information contained in this report may not be suitable forthe purposes of all investors.CMBIGMdoes not provide individually tailored investment advice. This report has been prepared without regard to the individual investment objectives, financial positionor special requirements. Past performance has no indication of future performance, and actual events may differ materially from that which is contained in thereport.The value of, and returns from, any investments are uncertain and are not guaranteed and may fluctuate as a result of their dependence on the This report or any information contained herein, have been prepared by theCMBIGM, solely for the purpose of supplying information to the clients ofCMBIGMor its affiliate(s) to whom it is distributed. This report is not and should not be construed as an offer or solicitation tobuy or sell any secur