China Hongqiao Group Limited

China Hongqiao Group Co., Ltd. (“China Hongqiao” or the “Group”; stock code: 01378) is a leading manufacturer of aluminum products in China. China Hongqiao, located in Shandong Province, China, is mainly engaged in the production and sale of liquid aluminum alloys, aluminum alloy ingots, aluminum alloy cast and rolled products, and aluminum busbars. With its huge scale and advanced technology, competitive cost structure, forward-looking industrial chain expansion strategy and experienced management team, the Group has successfully further consolidated its leading position in the industry and maintained its business growth and unique competitive advantage. In 2014, China's Hongqiao bucked the trend and continued to adhere to an active business development strategy and further expanded production capacity in order to continue to consolidate the Group's leading position in the Chinese aluminum industry. As of December 31, 2014, the Group had a total design annual production capacity of 4026,000 tons of aluminum products (2013:29.56 million tons), and production capacity increased by about 36.2% year on year. In 2014, the Group not only made progress in expanding the scale of its industrial clusters, but the overseas raw material supply layout also became a solid foundation to guarantee the Group's long-term steady development. In 2014, the Group made significant progress in overseas business. The Group established a joint venture alumina production company in Indonesia. The first phase of the design alumina production plant with an annual production capacity of 1 million tons will be completed and put into operation by the end of 2015, which will further increase the alumina self-sufficiency rate. Furthermore, the Group has developed bauxite supply channels in the Commonwealth of Australia, the Republic of India and the Federation of Malaysia, which ensures that the Group will continue to obtain bauxite supply at stable prices and supplies in the next few years; at the same time, the Group will continue to promote the African Guinea bauxite project. The advantage of ensuring a stable supply of raw materials has been further consolidated. With overseas raw material supply channels becoming more stable, the Group has gradually digested the original bauxite inventory. With the Group's careful layout overseas, the stable supply of raw materials has greatly reduced the potential risks caused by large fluctuations in raw material prices and fluctuations in supply and demand, and has laid a solid foundation for the Group's long-term steady development. In addition, the company has been rated by “Forbes Asia” magazine as one of the top 50 listed companies in the Asia-Pacific region for two consecutive years, and was also included in the Hang Seng High Dividend Ratio Index; on October 28, 2014, the General Office of the People's Government of Shandong Province issued the “Shandong Nonferrous Metals Industry Transformation and Upgrading Implementation Plan”, which clearly proposed a focus on supporting the development of the Company's wholly-owned subsidiary Shandong Weiqiao Aluminum & Electric Co., Ltd. (“AluminoElectric”) into a large enterprise group with a complete aluminum industry chain, showing that the Group has received double recognition and support from the capital market and local government. Looking forward to the future, the Group will rely on its advantages to further consolidate the “aluminum grid integration” and “upstream and downstream integration” industrial models, accelerate the development of industrial clusters, enhance cost advantages and scale effects, and consolidate the Group's leading position in China's aluminum industry. At the same time, the Group will continue to increase investment in scientific research and development and technology, strive to seek progress and breakthroughs in developing clean production and a circular economy, and comprehensively lead the advanced direction of the development of China's aluminum industry. As an enterprise with outstanding cost advantages and a unique industrial cluster development model, the Group will continue to benefit from the process of integration and upgrading of the aluminum industry. The Board is also full of confidence in its future development. Facing a market environment where opportunities and challenges coexist, the Group will adhere to its core competitiveness, pay close attention to policy orientation, strive to seize market opportunities, actively respond to future challenges, maintain a steady pace of progress, and create rich returns and long-term value for shareholders.