Henan Zhongfu Industrial Co Ltd

Henan Zhongfu Industrial's net profit attributable to the parent reached 1.881 billion yuan in the first half of 2026, surging 165.84% year-on-year, mainly benefiting from higher aluminium prices and lower costs. Operating revenue was 14.258 billion yuan, up 34.85% year-on-year, with gross margin jumping from 11.67% to 21.69%. However, total liabilities stood at 9.079 billion yuan, up 28.6% from the end of last year, and the asset-liability ratio rose to 33.26%, with short-term borrowings, notes payable, and long-term payables all increasing significantly. Encumbered assets totalled 11.416 billion yuan, accounting for 41.8% of total assets, mainly pledged or mortgaged for borrowings. Finance costs surged 166.75% due to reduced exchange gains, while accounts receivable and inventories expanded in tandem, increasing working capital absorption. The company's aluminium deep-processing export business accounts for 66.6% of revenue, exposing it to trade dispute and exchange rate fluctuation risks, and its second growth curve projects are still in the incubation stage, unlikely to provide performance support in the near term.

Zhongfu Industrial released its 2026 interim report, with net profit attributable to the parent company at 1.881 billion yuan, up 165.84% from the same period last year, achieving growth for three consecutive years. The company's total operating revenue was 14.258 billion yuan, up 34.85% year-on-year; net cash inflow from operating activities was 1.014 billion yuan, up 216.76% year-on-year. The latest asset-liability ratio is 33.26%, gross margin is 21.69%, ROE is 10.28%, and diluted earnings per share is 0.47 yuan.

On the evening of August 4, multiple listed companies released positive announcements. Fengzhushou's wholly-owned subsidiary, Ya'an Yunsuan, signed a server procurement agreement for computing power worth a total of 3.062 billion yuan, and signed a computing power service contract with Company B worth a total of 4.608 billion yuan, with a five-year cooperation period and an estimated average annual net profit of 60 million to 72 million yuan. Zhongfu Industrial disclosed its semi-annual report, with first-half net profit of 1.881 billion yuan, up 165.84% year-on-year, mainly benefiting from rising aluminum prices and increased sales of aluminum processed products. A subsidiary of Dajin Heavy Industry signed a contract with a Norwegian shipowner to build two bulk carriers, with a total value of about 1 billion yuan, to be delivered in batches by 2029. Meili Technology plans a private placement to raise no more than 585 million yuan for projects including an annual output of 2 million intelligent suspension units and 10 million electric and hydraulic drive elastic components. Jiangnan New Materials plans a private placement to raise no more than 1.6 billion yuan for the construction of high-purity electronic-grade copper oxide powder and liquid cooling heat dissipation module projects. Nord New Materials stated that monthly production scheduling of lithium battery copper foil continues to rise, and a second round of price adjustments is expected to be implemented in the third quarter. Zhongke Sanhuan is planning to acquire a controlling stake in Zhongdian Magnetic Acoustics, a manufacturer of rare earth permanent magnet devices. Zhidongli plans to invest about 300 million yuan in the industrialization of electronic specialty materials for optical communications, computing power thermal control, and ITO applications.

Gongyi Huifeng, a wholly-owned second-tier subsidiary of Zhongfu Industrial, plans to acquire the capacity quota and some assets of Gongyi Xinge's annual 200,000-ton recycled aluminum water project for 33.2057 million yuan, and on this basis invest in the construction of a project asset upgrade and renovation project and a new annual 100,000-ton recycled aluminum water project.

The electrolytic aluminum sector has recently seen both earnings and share prices rise, with institutions broadly bullish on future opportunities. The Wind Aluminum Industry Index has gained 7.62% over the past month, while Yunnan Aluminum and Shenhuo Coal & Power rose 20.23% and 22.97% respectively over the same period. Yunnan Aluminum expects net profit attributable to shareholders of 7.5 billion to 7.8 billion yuan in the first half of 2026, up 170.98% to 181.82% year-on-year, with second-quarter net profit alone reaching a record high of 3.9 billion to 4.2 billion yuan. Zhongfu Industrial expects first-half net profit of 1.8 billion to 1.95 billion yuan, up 154.42% to 175.62% year-on-year. Tianshan Aluminum expects first-half net profit of 4.2 billion yuan, up 101.52% year-on-year. Soochow Securities noted that the supply-side reform cap of around 45 million tonnes of capacity limits supply, while demand grows steadily, supporting a long-term bull case for aluminum prices. CMB International expects the global electrolytic aluminum supply deficit to widen to 2% of global demand in 2026, mainly due to production disruptions at Middle Eastern smelters, with aluminum prices rising 15% year-on-year. Zhongtai Securities believes that the widening overseas supply deficit will prolong the industry's tight supply-demand situation, and recommends institutional investors actively position in the electrolytic aluminum sector for defense.

Concerns over aluminum supply triggered by the blockage of the Strait of Hormuz amid US-Iran tensions sent the non-ferrous aluminum sector swinging higher during the session on July 23. By the midday break, industry giant Hongqiao Holdings, with a market value exceeding 260 billion yuan, had hit its daily limit up, along with Nanshan Aluminum. Zhongfu Industrial, Tianshan Aluminum, Huafon Aluminum, and Yunnan Aluminum all surged more than 5 percent. On the news front, US President Trump said that every time Iran fires at ships in the Strait of Hormuz, the US will bomb and destroy an Iranian bridge or power plant. Iran responded by threatening to strike the power supplies of US allies if attacked, declared the strait remains closed, and warned it would not allow a single drop of oil to be exported from the region if the US takes action. The Middle East accounts for nearly 10 percent of global aluminum production capacity, and its raw materials and finished products are highly dependent on shipping through the Strait of Hormuz. The expectation of supply disruptions directly triggered the sector's move. In addition, international crude oil prices jumped again, with New York light sweet crude futures settling at 86.83 dollars a barrel and London Brent crude futures at 94.07 dollars a barrel. Zhongtai Securities noted that the widening overseas electrolytic aluminum supply gap may persist longer, advising active positioning in the electrolytic aluminum sector for defense. Guohai Securities maintained its recommend rating on the aluminum industry.

Several non-ferrous metals companies have forecast significant year-on-year growth in first-half net profit, driving strong gains in related ETFs. As of the close on July 14, 2026, the ChinaAMC Non-Ferrous Metals ETF rose 5.36%, and the ChinaAMC Rare Metals ETF gained 4.31%. Companies such as Zhongfu Industrial, Chihong Zinc & Germanium, and Tianshan Aluminum have forecast sharp year-on-year increases in first-half net profit. From January to May this year, driven by demand from emerging industries like new energy and artificial intelligence, prices of products such as copper and aluminum remained elevated, boosting profit growth in the non-ferrous sector by 117.1%. Guotai Haitong Securities noted that the non-ferrous metals sector is benefiting from a dual catalyst of mid-year earnings forecast upgrades and valuation repair, and with the demand elasticity for metals like copper, tin, and tantalum from the AI supply chain, the sector's allocation value is becoming prominent.

Domestic electrolytic aluminum prices have remained elevated, prompting aluminum industry chain companies to issue positive profit forecasts for the first half of 2026. Zhongfu Industrial expects its first-half net profit attributable to the parent company to be between 1.8 billion and 1.95 billion yuan, a year-on-year increase of 154.42% to 175.62%. Tianshan Aluminum expects net profit attributable to the parent company of 4.2 billion yuan, up 101.52% year-on-year. Mi Yanbin, an aluminum analyst at Zhuochuang Information, noted that the average spot price of A00 aluminum in the first half was 24,200 yuan per ton, up 18.96% year-on-year, and the estimated average profit for electrolytic aluminum enterprises was around 8,293.46 yuan per ton, a year-on-year increase of 155.27%. Companies said the profit growth was mainly driven by high electrolytic aluminum prices, increased production and sales of high-value-added products, and cost reductions.

On the evening of July 8, several listed companies on the Shanghai and Shenzhen exchanges released significant positive announcements. Tianhao Energy plans to acquire 100% equity of Tianhao New Energy through a combination of share issuance and cash payment, along with raising supporting funds; trading of its shares will resume on July 9. Huakang Clean, as a member of a consortium, won the bid for the second section of the Jiufengshan semiconductor manufacturing base project, with a total bid amount of 1.956 billion yuan and the company's expected share at approximately 180 million yuan. BOE Technology Group expects its first-half net profit to be between 5 billion and 5.5 billion yuan, a year-on-year increase of 54% to 69%. Shengxin Lithium Energy expects its first-half net profit to be between 1 billion and 1.2 billion yuan, turning from a loss to a profit year-on-year. Yachuang Electronics expects its first-half net profit to be between 220 million and 270 million yuan, a year-on-year increase of 439% to 561.49%. Jiangxi Copper expects its first-half net profit to be between 7.55 billion and 8.5 billion yuan, a year-on-year increase of 80.86% to 103.61%. Zhongfu Industrial expects its first-half net profit to be between 1.8 billion and 1.95 billion yuan, a year-on-year increase of 154.42% to 175.62%. CICC expects its first-half net profit to be between 7.708 billion and 8.227 billion yuan, a year-on-year increase of 78% to 90%. Jingang Photovoltaic's controlling shareholder, Ohao Group, plans to increase its shareholding in the company by no less than 100 million yuan. China Nerin Engineering signed an overseas project design and supply framework agreement worth approximately 1.123 billion yuan. Zhongrun Optics plans to invest 1 billion yuan to build a high-precision optical component research and industrialization base. Huahong Grace's acquisition of 97.4988% equity of Huali Microelectronics and the related fundraising matters have received approval and registration from the China Securities Regulatory Commission.