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Aluminum Corporation of China Limited (Chalco)

  (Public, SHA:601600)

Company’s Fact

Aluminum Corporation of China Limited is an aluminum manufacturer and operator based in Beijing China. The Company’s business covers mining, refining and smelting of aluminum. The Company's main products are alumina, re-melted aluminum ingots, alumina chemicals, carbon materials, high purity aluminum and aluminum alloys, gallium metal as well as gallium oxide. During the year ended December 31, 2007, the Company distributed approximately 6.03 million metric tons of aluminum oxide as well as 3.09 million metric tons of virgin aluminum in the overseas markets.

Chalco is an investment management holding company authorized by the State agency. At the end of 2007, Chalco had total assets of more than 200 billion yuan. The Company has maintained and increased the value of its fixed assets and net capital every year, thus it is the second largest alumina and the third largest aluminum producer in the world. The Aluminum Corporation of China Holdings Ltd. is listed in New York, Hong Kong and Shanghai Stock Exchange, and is rated BBB+ for three consecutive years.

The Company’s special aluminum alloy and titanium have become the most important materials for China "Long March" series of rockets and "Shenzhou" spacecraft series of important military and other defense materials. The company has excellent management team and the wide range, skilled technical personnel.

Financial Overview

14.42
+0.40 (2.85%)
Jul 11 - Close    

Open:  14.33      Mkt Cap:  195.02B      P/E:      -      Dividend:      -    

High:  15.00      52Wk High:  60.60      F P/E:      -      Yield:      -    

Low:  14.25     52Wk Low:  11.76     Beta:      -      Shares:  13.52B    

Vol:  46.73M      Avg Vol:      -      EPS:      -      Inst. Own:      -

Key Stats & Ratios

Date                Open High   Low     Close Volume

11-Jul-08       14.33 15.00 4.25    14.42 46,726,200

10-Jul-08       14.21 14.56 14.00   14.02 38,370,200

9-Jul-08         14.00 14.65 13.85   14.54 52,145,800

8-Jul-08         14.10 14.74 13.88   14.12 56,987,500

7-Jul-08         13.08 14.10 13.00   13.84 37,950,700

4-Jul-08         13.60 13.76 12.95   13.13 33,613,300

3-Jul-08         13.08 14.30 12.80   13.81 43,296,500

2-Jul-08         13.01 13.72 12.72   13.39 24,889,100

1-Jul-08         13.05 13.45 12.57   12.98 22,619,000

30-Jun-08      13.07 13.52 12.58   13.04 20,595,800

27-Jun-08      13.50 13.96 12.80   13.19 42,806,600

26-Jun-08      12.85 14.19 12.66   14.19 38,190,800

25-Jun-08      12.20 13.07 12.08   12.90 27,691,500

24-Jun-08      12.02 12.47 11.76   12.29 25,311,300

23-Jun-08      12.48 12.73 12.00   12.30 20,699,800

20-Jun-08      12.88 13.67 12.08   13.03 23,257,700

19-Jun-08      14.25 14.25 12.88   12.88 29,315,000

18-Jun-08      13.00 14.32 12.70   14.31 37,134,300

17-Jun-08      14.20 14.37 12.86   13.02 15,032,000

16-Jun-08      14.48 14.80 13.81   14.15 14,019,800

13-Jun-08      15.58 15.70 14.45   14.48 14,696,200

12-Jun-08      15.30 15.90 15.22   15.59 17,028,600

11-Jun-08      16.10 16.10 15.06   15.39 15,526,700

10-Jun-08      17.70 17.72 16.46   16.46 16,849,700

6-Jun-08        18.35 18.54 18.08   18.29 6,867,000

As it has a leader position in the market, Chalco, since the beginning of landing the A-share market it had quickly started a round of bull market. Its stock price had been increasing from 20 yuan to around 60 yuan along the way. Such excellent performance and its large equity-scale had naturally aroused the concern of the market. However, since last year, with the adjustment of A-share market, the stock price of Chalco also is going down. Recently, the stock has dropped to around 14 yuan, landed lower than its beginning price in the A-share market. According to Wind’s statistic, up to Thursday, China Aluminum industry stock has declined 64.2730% this year.

In June this year, its shares fell sharply in Shanghai after the company projected a significant decline in first-half net profit. Chalco said its first-half to June net profit under Chinese accounting standards is expected to be down more than 50% compared to a year earlier.

It is said that the poor weather and snowstorms that hit many parts of China earlier this year had resulted in power shortages, leading to a halt in production at some of its plants. One the other hand, higher prices of raw materials and fuels, have increased its production costs.

Recently, Chalco has reached a bottleneck in its latest talks with Saudi Arabia on a $4.5 billion aluminum smelter project. The Chalco official said negotiation representatives had failed to achieve expected progress in determining project details, and the company will work with the Saudi Arabian government to sort out a plan.

Chalco, Malaysia's MMC Corp. (2194.KU) and Saudi Arabia's Saudi Binladin Group have signed a framework agreement to build an aluminum smelter with an annual production capacity of 1 million metric tons and a power plant with a capacity of 1,860 megawatts in Saudi Arabia's Jazan Economic City. It is reported that Chalco has planned to use its own alumina produced in China, and the plant's aluminum output is expected to be exported back to China.

Despite the poor luck that Chalco is having currently, as it is involved in an important industry and is a leading company in China, institutions or researchers give a positive feedback. Everbright Securities researcher, Wang Feng said, Chalco in next two years will focus on cost control and no large-scale capacity expansion plans. The company will focus on expanding the development and construction of the bauxite hill, and fight for increasing its self-sufficiency rate to 70% before the end of 2010 to achieve the fundamental alumina production cost control. As for electrolytic aluminum, the company will adopt various ways to enhance its power plants and the proportion of direct power supply to minimize the power supply costs.

The researcher predicted that, in the next two years, the domestic primary aluminum prices will be on higher trend, the main operation will be in the interval of between18,500 yuan to 19,500 yuan per ton. From production scale, in the next 2 years the company’s production growth will slow down, and its overseas projects are mostly in the production cycle after 2010. Since the Company is under cost-control process, its performance is expected to grow in the second half of 2009.