According to Radar Finance news on the evening of July 31, a private placement announcement of 12 billion yuan put Hongqiao Holding (002379.SZ) in the spotlight. The announcement itself is not complicated — 7.9 billion yuan will be invested in wind power and photovoltaic projects, 2.3 billion yuan in deep aluminum processing, and the remaining 1.8 billion yuan will be used for loan repayment and working capital replenishment. However, its release timing is very subtle: the next day, August 1, the Implementation Measures for the Minimum Target of Renewable Energy Consumption and the Weight System of Renewable Energy Power Consumption Responsibility was officially implemented.
From that day on, all domestic electrolytic aluminum enterprises in China have to face a brand new “green power examination question”.
Hongqiao rolled out the 10-billion-yuan plan 12 hours before the policy was implemented, which is certainly no coincidence. Looking at the list of raised investment projects, 17 wind and photovoltaic sub-projects are located in Honghe Prefecture and Wenshan Prefecture of Yunnan Province, and Binzhou of Shandong Province, with a total installed capacity of 1,055MW of wind power and 615MW of photovoltaic power. At first glance, wind and photovoltaic projects take up nearly 70% of the raised funds, which is the core value of the entire announcement.

Data source: the “2026 A-share Private Placement Plan for Specific Targets” released by the company on July 31, 2026
In recent years, Hongqiao has moved more than 2.28 million tons of electrolytic aluminum production capacity to Yunnan, with a long-term planned capacity of nearly 3.96 million tons, accounting for more than 60% of the company’s total production capacity. The biggest natural advantage of Yunnan is hydropower — the cost of per kWh electricity is extremely low in the wet season, but once it enters the dry season, the water flow drops sharply, making power supply a tight constraint.
This dilemma is a common weakness for all electrolytic aluminum enterprises in Yunnan, and Hongqiao’s 1,670MW wind and photovoltaic units are built to fill this gap.
In terms of power generation characteristics, hydropower, wind power and photovoltaic power are naturally staggered in peak output — wind power is mainly generated in winter and at night, photovoltaic power has the highest output in summer and during the daytime, hydropower is abundant in summer and autumn while insufficient in winter and spring. The three power sources complement each other, making the annual green power supply curve much smoother.

By the end of 2025, the proportion of green power in Hongqiao’s total power consumption has reached 40%. After this round of wind and photovoltaic units are put into operation, this proportion is very likely to exceed 50% in the next two to three years. The Shanghai Securities News specially pointed out in its report on August 1 that the complementary mode of “wind power + photovoltaic power + hydropower” can effectively smooth the fluctuation of overall power supply.
For Hongqiao, this is not only a matter of “greener” power, but more crucially, a matter of “more stable” power — there is no obvious seasonal gap in annual green power supply, and the fluctuation of profit margin will be narrowed accordingly.
The green power consumption system that took effect on August 1 provides three compliance paths for electrolytic aluminum enterprises: purchasing external green power, purchasing green certificates, and building self-owned renewable energy facilities. The common problem of the first two paths is that the cost is not under their own control — the price of green power fluctuates with the market, and it will still rise to a very high level in the dry season; green certificates can only meet the regulatory requirements, but cannot reduce the actual power consumption cost.
Although building self-owned wind and photovoltaic projects requires large upfront investment, once put into operation, the levelized cost of per kWh electricity is highly predictable and extremely low.
Industry data from the China Photovoltaic Industry Association and the Wind Energy Committee shows that the current levelized cost of onshore wind power has been reduced to 0.10 to 0.15 yuan per kWh, and that of photovoltaic power is below 0.25 yuan. With the support of hydropower base, the weighted per kWh electricity cost of Hongqiao’s Yunnan base is expected to be locked in the lowest range of the whole industry, completely getting rid of the trouble of market-oriented electricity price fluctuations.
If the new green power consumption policy is the “driving force”, the EU Carbon Border Adjustment Mechanism (CBAM) is the “pulling force”. Starting from 2026, CBAM has officially entered the charging stage.
Industry reference data from the China Nonferrous Metals Industry Association shows that the carbon emission of traditional thermal power aluminum is about 2.2 tons of CO₂ equivalent per ton. Calculated at the average auction price of CBAM certificates in the first quarter of 2026, which is 75.36 euros per ton, the carbon tariff cost per ton is as high as about 166 euros. In contrast, the carbon emission of green power aluminum can be reduced by 80%, and the carbon tariff drops sharply to around 33 euros.

Each ton of green power aluminum can save more than 130 euros in exports compared with thermal power aluminum, equivalent to more than 1,000 RMB.
This sum of money does not appear in the profit statement of any aluminum enterprise listed on A-share market, but it will be truly reflected in the procurement orders of overseas customers, in the pricing power, and in the changing competitiveness of the global supply chain.
The most critical point is that most small and medium-sized electrolytic aluminum enterprises cannot afford the huge investment of billions or tens of billions of yuan in self-built wind and photovoltaic projects at all. The moment the policy door opens, only a few enterprises can run into it.
The electrolytic aluminum industry has an unavoidable policy red line: the domestic production capacity ceiling is locked at 45 million tons per year. The whole industry is facing the same problem — the ceiling is within reach, and the path of quantity growth has come to an end.
Hongqiao has chosen two breakthrough paths.
The first path is to extend the industrial chain from the very beginning to the end. After completing the full acquisition of Hongtu Industrial, Hongqiao has built a complete industrial chain covering bauxite from Guinea, alumina, electrolytic aluminum, and deep aluminum processing. The 2025 annual report shows that more than 90% of the primary aluminum is directly supplied to downstream processing enterprises in the form of molten aluminum, which is far higher than the industry average of 75%, saving the energy consumption and carbon emission of the remelting process.
The second path is to extend to high value-added deep processing. This 2.3 billion-yuan investment in deep aluminum processing will produce 500,000 tons of high-end deep-processed aluminum plates and strips targeting products with high technical barriers such as liquid cooling plates and composite brazing foils, and 500,000 tons of high-precision aluminum alloy flat ingots for downstream sectors including automotive lightweighting and green buildings. Mi Yanbin, an aluminum industry analyst at Sublime Information, commented that leading enterprises are actively extending to downstream processing and even near-end sectors after forming scale effects, and the advanced aluminum processing industrial cluster is taking shape at an accelerated pace.
In terms of equity structure, this private placement also brings a positive change: it adopts inquiry-based issuance, targeting no more than 35 professional institutional investors, the controlling shareholder does not participate in the subscription, and the maximum number of issued shares is 10% of the total share capital. Opening subscription to diversified institutional investors can effectively expand the tradable share volume and enhance liquidity.
The 35 institutions bring not only funds, but also research coverage and pricing participation from professional investors — for an equity structure that evolves from high concentration to appropriate diversification, this is an inevitable process to move towards maturity.
A week ago, Hongqiao Holdings just released its performance forecast: the attributable net profit in the first half of the year was 15 billion to 16 billion yuan, a year-on-year increase of 70% to 81%. Wind consensus expectation puts the full-year net profit at about 31 billion yuan — corresponding to a dynamic P/E ratio of only 8.73 times for the current market value of 270.7 billion yuan.
When you put this figure in the industry context, the contrast becomes obvious.

Yunnan Aluminum Co., Ltd., which also takes Yunnan green power aluminum as its core competitiveness, has a 2026 dynamic P/E ratio of about 15 times; industry leader Aluminum Corporation of China has a dynamic P/E ratio of about 12 times. Hongqiao has an electrolytic aluminum production capacity of 6.54 million tons, a weighted ROE of 34.63% in 2025, and an annualized ROE of more than 50% in the first quarter. Its industrial chain depth and scale rank first in the industry, but its valuation is at the bottom of the peers — only over 60% of the industry average.
Where does this discount come from? The market pricing habit tends to label Hongqiao as a “traditional cyclical product”. But the underlying factors have changed. When the proportion of green power exceeds 50%, when deep processing products start to contribute high value-added profits, and when the carbon tariff difference is converted into real pricing power at the export end, the shift of valuation anchor from “cyclical product” to “green power aluminum integrated platform” is no longer a question of whether it will happen, but a confirmed fact.
Under the Wind consensus expectation, the corresponding share price at 12 times P/E ratio is about 28.6 yuan, which is almost exactly in line with the current comprehensive target price of 29 yuan set by institutions. This means that if Hongqiao’s valuation is pulled slightly above the industry average — it does not need to get the pure green power premium like Yunnan Aluminum — there is already an implied upside space of nearly 40%.
In this private placement, 70% of the funds will be used for wind and photovoltaic construction, 20% for deep processing, and 10% for debt repayment. It is not blind fundraising, but a concentrated ammunition loading for its existing strategy — “moving aluminum production capacity from north to south, switching thermal power to green power, and extending from raw materials to finished materials”.
The new green power policy on August 1 has been launched. By investing 12 billion yuan at this moment, Hongqiao has obtained far more than 1670MW of wind and photovoltaic units, but also a first-mover advantage in the whole industry’s green power competition in the next 20 years, which is very difficult for competitors to catch up with.
该文观点仅代表作者本人，36氪平台仅提供信息存储空间服务。
36kr Europe (eu.36kr.com) delivers global business and markets news, data, analysis, and video to the world, dedicated to building value and providing business service for companies’ global expansion.
© 2024 36kr.com. All rights reserved.

source