China Hongqiao jumps as Citi maintains 'buy' on latest aluminium production cut

China Hongqiao

20/02/2023 05:13

** Shares of aluminium products manufacturer China Hongqiao
Group  1378.HK  jump as much as 13.5% to HK$9.40, and on course
for the biggest daily pct rise since September 2021 if gains
hold
    ** Stock biggest gainer in Hang Seng Index  .HSI , Hang Seng
Composite Index  .HSCI , Hang Seng Commerce & Industry Index
 .HSNC  and material index  .HSCIM  
    ** An additional 415kt aluminium smelting capacity was
ordered by Southern Grid to cut production from Feb 18, Citi
wrote in a research note on Sunday citing industry discussions,
adding firms are required to cut production by up to over 40%
    ** Citi says the latest move comes after the production cuts
since 4Q22 due to low hydro-power generation in Yunnan Province
and these smelters are unlikely to resume production in 1H23 due
to tight power supply from hydro
    ** Citi maintains "buy" rating on China Hongqiao saying its
plant in Yunnan is not required to cut production this time
    ** Citi maintains "buy" on Chalco  2600.HK , sending its
Hong Kong-listed stock up 6.9% and Shanghai shares  601600.SS 
up 4.7%
    ** Hang Seng Commerce & Industry Index  .HSNC , Hang Seng
Composite Index  .HSCI , Hang Seng Index  .HSI  and the material
index  .HSCIM  climb between 0.7% and 2.1%
 (Reporting by Donny Kwok)
 ((donny.kwok@thomsonreuters.com))