Zhongfu profit surges on high aluminium prices; debt and export risks build
First-half profit confirmed up 165.84% Zhongfu's final first-half report showed net profit of 1.881 billion yuan, up 165.84%, on revenue up 34.85%. Gross margin jumped from 11.67% to 21.69% as aluminium prices rose and costs fell. This confirms the earlier profit forecast and shows the core business is earning far more per sale.
The confirmed earnings jump is the main reason the stock is moving and is new versus the earlier forecast.
Aluminium supply fears lift sector Middle East tensions and the Strait of Hormuz closure raised fears of aluminium supply disruptions, pushing aluminium stocks up sharply. The region makes about 10% of global aluminium. Less supply available tends to lift prices, which directly boosts Zhongfu's revenue and profit.
A supply shock that raises aluminium prices is a key force behind Zhongfu's improving earnings.
AI and new-energy demand supports prices Demand from AI and new-energy industries kept copper and aluminium prices high, helping non-ferrous profits rise 117.1% in January-May. Analysts expect a global aluminium supply deficit to widen in 2026. Steady demand plus capped supply supports higher prices, which helps Zhongfu's sales and margins.
Demand growth is a structural force keeping aluminium prices and Zhongfu profits elevated.
Rising debt and export exposure Total liabilities rose 28.6% to 9.079 billion yuan, the debt ratio climbed to 33.26%, and 41.8% of assets are pledged. Finance costs jumped 166.75%. Exports are 66.6% of revenue, exposing Zhongfu to trade disputes and currency swings. These risks could weigh on the stock.
This is the main counterweight to the profit surge and matters for the stock's risk profile.