Hongqiao Holdings to Raise Up to RMB 12 Billion for Yunnan, Shandong Green Projects and Debt Repayment

On July 31, electrolytic aluminum producer Hongqiao Holdings announced a private placement plan to raise up to RMB 12 billion, primarily for wind power projects in Honghe Prefecture, Yunnan, and Binzhou, Shandong; a solar project in Wenshan Prefecture, Yunnan; an aluminum deep-processing project in Yunnan; and to repay bank loans and supplement working capital.

In February 2026, the Shenzhen Stock Exchange issued a package of measures to optimize refinancing and support financing for green projects. In 2025, a plan jointly released by ten departments, the Implementation Plan for High-Quality Development of the Aluminum Industry, specified that the clean energy usage ratio in the electrolytic aluminum industry should exceed 30% by 2027 and reach above 50% by 2030. For traditional production areas such as Shandong, regulators require that the green electricity consumption ratio be no less than 26.2% in 2025 and rise to 28.3% in 2026.

The global supply pattern for electrolytic aluminum continues to adjust. Since 2026, the Middle East conflict has led to production cuts of more than 2.2 million tonnes of electrolytic aluminum capacity in the region. Under pressure from high electricity prices and carbon tariffs, EU primary aluminum output has declined, with 2025 output of about 1.2 million tonnes, down nearly 60% from 2005. As of the end of 2025, China's installed annual capacity for electrolytic aluminum stood at 44.83 million tonnes, approaching the 45 million tonne capacity ceiling; 2025 output was 44.23 million tonnes, about 2.11 million tonnes below consumption.

Hongqiao Holdings has previously built a green aluminum industrial cluster in Wenshan Zhuang and Miao Autonomous Prefecture, Yunnan. As of the end of 2025, the company had relocated a cumulative 2.176 million tonnes of electrolytic aluminum capacity to the Yunnan production base. Among the projects in this fundraising, the Wenshan wind-solar power project in Yunnan adopts a development model with wind as the primary source and solar as a supplement, forming a multi-energy complementary power supply system with local hydropower. Yunnan's hydropower output is closely tied to the rainy season, with lower electricity prices during the wet season from May to October and tight power supply during the dry season from November to April. Wind power output is concentrated at night and in winter, while solar output is concentrated during the day and in summer, complementing the wet-dry cycle of hydropower.

Electricity accounts for more than 40% of electrolytic aluminum costs. For every one fen (RMB 0.01) change in the comprehensive electricity price, the cost per tonne of aluminum fluctuates by about RMB 130 to RMB 150. Hongqiao Holdings built self-owned power plants during its Shandong production base period. After investing in the wind-solar-hydro multi-energy complementary project in Yunnan, the new energy projects are adjacent to the production base, reducing transmission losses and providing a stable load for new energy. Once completed, the project will lower the company's carbon emission intensity and improve its green and low-carbon certification system.

After the Shandong green electricity direct-connection project is implemented, it will gradually replace the company's purchases of thermal power from related parties, reducing the scale and frequency of related-party transactions. Hongqiao Holdings currently has a total A-share capital of 13.031 billion shares, with the controlling shareholder and its concert parties holding a combined 88.99%. The floating A-shares are 1.136 billion shares, accounting for 8.72% of total share capital. This private placement will introduce external capital, expand total share capital, and increase the proportion of floating shares.

In 2025, Hongqiao Holdings achieved revenue of RMB 156.72 billion, up 4.2% year-on-year; net profit attributable to shareholders was RMB 17.86 billion, up 3.7%.

On dividends, Hongqiao Holdings' Hong Kong-listed parent has long maintained a dividend payout ratio above 50%. After completing restructuring at the end of 2025, the company has launched a special dividend.