On August 31, 2025, Zhongfu Industrial, an international high-end aluminium alloy new material enterprise, announced its performance for the first half of 2025, showing mixed results on a year-on-year basis. A significant fluctuation occurred due to the weakened alumina price, while the electrolytic aluminium equity production capacity increased sharply in the second quarter.
The company's revenue in the first half of 2025 was recorded at RMB 10.57 billion (USD 1.48 billion), attributing to a year-on-year dip of 3.8 per cent. Net attributable profit stood at RMB 0.71 billion (USD 99.6 million), which inched higher year-on-year by 59.6 per cent. The non-attributable net profit also inched up to RMB 0.65 million (USD 91,000), showing a 52.5 per cent gain year-on-year.
Focus: Second quarter
The total revenue generated in the second quarter of 2025 was RMB 5.55 billion (USD 777 million), which, if compared with the same period the previous year, shows a decline by 4.5 per cent year-on-year. However, if compared with the last month, the firm witnessed positive movement with an increase of 10.6 per cent month-on-month.
In the concerned quarter, the company's net profit was recorded at RMB 0.48 billion (USD 67.2 million), which year-on-year increased by 19.4 per cent and month-on-month by 107.2 per cent. A similar trend had been observed concerning the net non-return profit, which in this quarter was recorded at RMB 0.46 billion (USD 64.5 million), indicating a 13.8 per cent year-on-year and 152.9 per cent month-on-month increase.
Impact of weakened prices
Aluminium prices declined, while Q2 profits recorded a significant uptick. At the volume front, 24 per cent of Zhongfu aluminium share is currently held by Yulian group and the status is expected to be completed by the end of February 2025. Additionally, its electrolytic aluminium equity production capacity also showed an uptick to 0.75 million.
On the price front, the first half of 2025 saw the aluminium price at RMB 20,321 per tonne (USD 2,850.50), representing a 2.7 per cent year-on-year gain. Simultaneously, the Guangxi alumina price was at RMB 3,518 per tonne (USD 493.20), which dipped by 0.3 per cent year-on-year. Southwest pre-baked anode's average price was recorded at RMB 5,329 per tonne (USD 747), marking the year-on-year increase of 18.4 per cent.
In the first half of 2025, the gross margin was 11.7 per cent, up by 1.4 per cent year-on-year. The same in the second quarter was witnessed, an upward movement, which was recorded at 14.5 per cent, reflecting an escalation of 5.9 per cent month-on-month. The first half represented a net margin of 5.9 per cent, owing to a month-on-month upward trend of 1.6 per cent. Looking at the second quarter, the net margin also went up to 7.9 per cent, a month-on-month gain of 4.2 per cent.
The change in the overall profit level concerning electrolytic aluminium is deemed to increase mainly because of the decrease in the price of aluminium oxide.
Reflection of the market conditions
Irrespective of the rising processing costs, the profits from the aluminium processing decreased extensively in the first half of 2025. From the period January to June 2025, both the production and sales of the aluminium deep processing products showed stable movement, with the sales volume reaching 0.293 million tonnes.
In the same time frame, the firm's net income showed an uptick of 56 per cent year-on-year, with the profit level improving each year in relation to the rising production costs. Concurrently, the recycled aluminium added in the first six months of 2025 showed aluminium processing products crossed 61 per cent, and steady progress is seen concerning the 0.5 million tonnes of aluminium recycling project, aiding in further reduction of the carbon content.
Other financial updates
Other revenue was measured to be at RMB 0.075 billion (USD 10.52 million), up from RMB 0.03 billion (USD 4.21 million) year-on-year, mainly due to increased VAT deductions, of which the second quarter was RMB 0.03 billion (USD 4.21 million), representing a fall of RMB 0.015 billion (USD 2.10 million) month-on-month.
Concerning the shareholders' return, for the first six months, the company had introduced a plan titled "Shareholder Dividend Return Plan 2025 to 2027". With this plan, the company is aiming to have an annual cash market dividend payout ratio of at least 60 per cent each year during the stated period.
Other highlights
Electrolytic aluminium equity production capacity rose to 0.75 million tons, boosting operational flexibility. By the end of February 2025, the company had completed the acquisition of Yulian Group's 24 per cent stake in Zhongfu Aluminium, the controlling shareholder, bringing its total holding to 100 per cent. Equity production capacity increased from 0.6285 million tonnes to 0.75 million tonnes, further enhancing performance adaptability.
Alumina prices have softened, supporting a clear recovery in electrolytic aluminium profits. The company sources alumina externally and in 2025, the launch of new production capacity led to expectations of oversupply, driving alumina prices down and significantly lowering raw material costs, which in turn boosted electrolytic aluminium profitability.
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Electricity cost reductions are expected to enhance electrolytic aluminium profitability. The company's electrolytic aluminium capacity stands at 0.5 million tonnes in Guangyuan for hydropower aluminium and 0.25 million tonnes in Gongyi for thermal power aluminium.
In 2025, the Sichuan Electricity Trade Plan eliminated bundled non-hydropower purchases, lowering hydropower electricity costs. Concurrently, falling coal prices are set to reduce electricity costs for Gongyi Thermal Power and Aluminium, further supporting profitability growth in the electrolytic aluminium segment.
The company has also implemented equity incentives to drive employee motivation. Under the 2025 employee stock ownership plan, stock purchases have been completed, aligning employee and company interests and supporting performance delivery.
Future proposition
Rising electrolytic aluminium equity production capacity, declining alumina costs and a recovery in aluminium profitability underpin the company's outlook. Net profit is projected at RMB 1.83 billion (USD 256.6 million), RMB 2.46 billion (USD 344.7 million) and RMB 2.73 billion (USD 382.8 million) for 2025–2027, corresponding to P/E ratios of 12×, 9× and 8× at current market prices, supporting a "recommended" rating.
Rising raw material costs, slower-than-expected project progress, and weaker-than-anticipated downstream demand are weighing on the electrolytic aluminium segment.
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