Aluminum Corporation of China (SEHK:2600) - Share price, News & Analysis

Q: What is the Fair Price of 2600 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

2600 (HK$3.04) is trading below our estimate of [[fair value]] (HK$13.93)

2600 fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	1/6
Past Performance	4/6
Financial Health	4/6
Dividends	0/6

2600 Stock Overview

Rewards

Trading at 78.2% below our estimate of its fair value

Earnings are forecast to grow 4.27% per year

Earnings grew by 275.9% over the past year

Risk Analysis

Has a high level of debt

Large one-off items impacting financial results

Aluminum Corporation of China Competitors

China Hongqiao Group

SEHK:1378

HK$79.6b

United Company RUSAL International

SEHK:486

HK$49.5b

Xingfa Aluminium Holdings

SEHK:98

HK$4.0b

Jiangxi Copper

SEHK:358

HK$57.8b

Price History & Performance

Summary of all time highs, changes and price drops for Aluminum Corporation of China
Historical stock prices
Current Share Price	HK$3.04
52 Week High	HK$7.49
52 Week Low	HK$2.90
Beta	2.42
1 Month Change	-14.12%
3 Month Change	-35.32%
1 Year Change	-34.62%
3 Year Change	18.29%
5 Year Change	-25.31%
Change since IPO	118.71%

Recent News & Updates

Jun 19

Is Now The Time To Put Aluminum Corporation of China (HKG:2600) On Your Watchlist?

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story...

May 31

Aluminum Corporation of China (HKG:2600) Seems To Use Debt Quite Sensibly

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...

Shareholder Returns

	2600	HK Metals and Mining	HK Market
7D	-3.2%	-3.5%	-1.9%
1Y	-34.6%	-21.0%	-20.6%

Return vs Industry: 2600 underperformed the Hong Kong Metals and Mining industry which returned -21% over the past year.

Return vs Market: 2600 underperformed the Hong Kong Market which returned -20.6% over the past year.

Price Volatility

Is 2600's price volatile compared to industry and market?
2600 volatility
2600 Average Weekly Movement	8.5%
Metals and Mining Industry Average Movement	7.0%
Market Average Movement	6.9%
10% most volatile stocks in HK Market	13.7%
10% least volatile stocks in HK Market	3.3%

Stable Share Price: 2600 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: 2600's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2001	60,056	Runzhou Zhu	https://www.chalco.com.cn

Aluminum Corporation of China Limited, together with its subsidiaries, manufactures and sells alumina, primary aluminum, aluminum alloys, and carbon products in the People's Republic of China and internationally. The company operates through five segments: Alumina, Primary Aluminum, Trading, Energy, and Corporate and Other Operating. The Alumina segment mines for and purchases bauxite and other raw materials; refines bauxite into alumina; and produces and sells alumina, as well as refined alumina, gallium, and multi-form alumina bauxite.

Aluminum Corporation of China Fundamentals Summary

How do Aluminum Corporation of China's earnings and revenue compare to its market cap?
2600 fundamental statistics
Market Cap	CN¥72.33b
Earnings (TTM)	CN¥5.46b
Revenue (TTM)	CN¥292.72b

8.1x

P/E Ratio

0.2x

P/S Ratio

Is 2600 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
2600 income statement (TTM)
Revenue	CN¥292.72b
Cost of Revenue	CN¥264.45b
Gross Profit	CN¥28.27b
Other Expenses	CN¥22.80b
Earnings	CN¥5.46b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.32
Gross Margin	9.66%
Net Profit Margin	1.87%
Debt/Equity Ratio	99.3%

How did 2600 perform over the long term?

See historical performance and comparison

Dividends

1.2%

Current Dividend Yield

10%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 2600 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 2600?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 2600. This is calculated by dividing 2600's market cap by their current preferred multiple.
What is 2600's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥72.33b

2600 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.5x
Enterprise Value/EBITDA	5.7x
PEG Ratio	1.9x

Price to Earnings Ratio vs Peers

How does 2600's PE Ratio compare to its peers?

2600 PE Ratio vs Peers

The above table shows the PE ratio for 2600 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	3.8x
1378 China Hongqiao Group	4.3x	6.2%	HK$79.6b
486 United Company RUSAL International	2.2x	-19.8%	HK$49.5b
98 Xingfa Aluminium Holdings	3.7x	n/a	HK$4.0b
358 Jiangxi Copper	5.1x	5.3%	HK$57.8b
2600 Aluminum Corporation of China	8.1x	4.3%	HK$84.7b

Forward PE

Price-To-Earnings vs Peers: 2600 is expensive based on its Price-To-Earnings Ratio (8.1x) compared to the peer average (3.8x).

Price to Earnings Ratio vs Industry

How does 2600's PE Ratio compare vs other companies in the HK Metals and Mining Industry?

Price-To-Earnings vs Industry: 2600 is expensive based on its Price-To-Earnings Ratio (8.1x) compared to the Hong Kong Metals and Mining industry average (5.5x)

Price to Earnings Ratio vs Fair Ratio

What is 2600's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

2600 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	8.1x
Fair PE Ratio	7x

Price-To-Earnings vs Fair Ratio: 2600 is expensive based on its Price-To-Earnings Ratio (8.1x) compared to the estimated Fair Price-To-Earnings Ratio (7x).

Share Price vs Fair Value

What is the Fair Price of 2600 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 2600 (HK$3.04) is trading below our estimate of fair value (HK$13.93)

Significantly Below Fair Value: 2600 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 2600 is poor value based on its PEG Ratio (1.9x)

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Future Growth

How is Aluminum Corporation of China forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

4.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2600's forecast earnings growth (4.3% per year) is above the savings rate (1.6%).

Earnings vs Market: 2600's earnings (4.3% per year) are forecast to grow slower than the Hong Kong market (16.5% per year).

High Growth Earnings: 2600's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2600's revenue (0.04% per year) is forecast to grow slower than the Hong Kong market (10.1% per year).

High Growth Revenue: 2600's revenue (0.04% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 2600's Return on Equity is forecast to be low in 3 years time (12.3%).

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Past Performance

How has Aluminum Corporation of China performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

39.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 2600 has a large one-off loss of CN¥3.5B impacting its March 31 2022 financial results.

Growing Profit Margin: 2600's current net profit margins (1.9%) are higher than last year (0.7%).

Past Earnings Growth Analysis

Earnings Trend: 2600's earnings have grown significantly by 39.5% per year over the past 5 years.

Accelerating Growth: 2600's earnings growth over the past year (275.9%) exceeds its 5-year average (39.5% per year).

Earnings vs Industry: 2600 earnings growth over the past year (275.9%) exceeded the Metals and Mining industry 45.2%.

Return on Equity

High ROE: 2600's Return on Equity (11.3%) is considered low.

Discover strong past performing companies

Financial Health

How is Aluminum Corporation of China's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 2600's short term assets (CN¥55.2B) exceed its short term liabilities (CN¥51.3B).

Long Term Liabilities: 2600's short term assets (CN¥55.2B) do not cover its long term liabilities (CN¥70.2B).

Debt to Equity History and Analysis

Debt Level: 2600's net debt to equity ratio (68.7%) is considered high.

Reducing Debt: 2600's debt to equity ratio has reduced from 171.7% to 99.3% over the past 5 years.

Debt Coverage: 2600's debt is well covered by operating cash flow (46.2%).

Interest Coverage: 2600's interest payments on its debt are well covered by EBIT (5.4x coverage).

Balance Sheet

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Dividend

What is Aluminum Corporation of China current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

1.22%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 2600's dividend (1.22%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.75%).

High Dividend: 2600's dividend (1.22%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.85%).

Stability and Growth of Payments

Stable Dividend: 2600 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are stable.

Growing Dividend: 2600 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: 2600 is not paying a notable dividend for the Hong Kong market.

Cash Payout to Shareholders

Cash Flow Coverage: 2600 is not paying a notable dividend for the Hong Kong market.

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.1yrs

Average management tenure

CEO

Runzhou Zhu (57 yo)

1.75yrs

Tenure

CN¥1,269,000

Compensation

Mr. Zhu Runzhou serves as President at Aluminum Corporation of China Limited since October 21, 2020 and served as its Vice President since May 25, 2018 until October 21, 2020. He has been an Executive Dire...

CEO Compensation Analysis

Compensation vs Market: Runzhou's total compensation ($USD189.39K) is below average for companies of similar size in the Hong Kong market ($USD1.03M).

Compensation vs Earnings: Runzhou's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: 2600's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.

Board Members

Experienced Board: 2600's board of directors are not considered experienced ( 1.1 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/05 00:00
End of Day Share Price	2022/07/05 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31