China Hongqiao Group has announced its plan to raise HKD11.68 billion (USD 1.5 billion approximately) through a share sale. The largest private aluminium producer will use the accumulated funds to support projects and repay debt, as mentioned in their filing with the Hong Kong stock exchange on Tuesday.
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The company intends to sell up to 400 million existing shares at HKD29.20 (USD 3.75 approximately) each, a 9.6 per cent discount to Monday’s closing price. The placed shares would represent about 4 per cent of the enlarged share capital. Hongqiao noted that the offer price is roughly 2.2 per cent above the average closing price of around HKD28.58 (USD 3.68 approximately) over the past 30 trading days.
The board said the placement and subscription provide an opportunity to raise capital while expanding the shareholders and capital base.
“In view of the current capital market conditions, the board considers the placing and the subscription represent a good opportunity for the company to raise further capital for the company, while at the same time broadening its shareholder and capital base,” the filing said.
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The fundraising comes as aluminium prices trade near a three-year high, supported by steady demand and controlled supply. Citigroup analyst Jack Shang wrote earlier this month that aluminium remains one of their preferred sectors, pointing to higher-for-longer margins due to supply constraints on China’s capacity cap and limited new capacity in Indonesia.
Citigroup raised its 12-month target price for China Hongqiao to HKD36 (USD 4.63 approximately) from HKD25.20 (USD 3.24 approximately), based on strong profitability, the firm’s shareholder return policy, and a cautious approach to Indonesian expansion.
China Hongqiao, Shandong Nanshan Aluminium, and Tsingshan Holding Group are among the Chinese companies developing aluminium operations in Indonesia. Hongqiao’s share sale follows a US$300 million convertible bond issuance in Hong Kong in March for refinancing and general corporate use.
Equity fundraising in Hong Kong, including IPOs, share placements, and equity-linked debt such as convertible bonds, reached USD 65.4 billion in the first 10 months of the year 2025, compared with USD 22.3 billion a year earlier, according to Dealogic.
China Hongqiao’s shares fell 7.7 per cent to HKD29.80 (USD 3.83 approximately) in early trading, reducing their year-to-date gain to 153.4 per cent.
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