Chalco Shares Rise After Positive Profit Alert
By Amanda Lee
Shares of Aluminum Corp. of China surged after the company guided for a doubling of its first-half net profit, raising hopes of continued strong financial performance in the upcoming years.
The stock rose by as much as 11% in early trade on Friday in Hong Kong.
The company, also known as Chalco, said Thursday that it expects net profit for the six months ended June to range between 6.5 billion yuan to 7.5 billion yuan (US$895.6 million to US$1.03 billion). The aluminum maker reported net profit of CNY3.4 billion during the same period last year.
Chalco attributed the gains to improving operational efficiency and cost controls.
Citi Research analysts said Chalco's guidance beat its expectations. They attributed the expected first-half profit increase mainly to higher average selling prices for aluminum and alumina, as well as lower production cost for aluminum.
Citi expects Chalco to have a higher estimated return on equity over 2024-2026 than the historical average, as the company will "benefit from higher aluminum margin with decreasing coal and other raw material prices."
Near midday, the stock was last up 2.6% at 5.44 Hong Kong dollars (US$0.70).
Write to Amanda Lee at amanda.lee@wsj.com
(END) Dow Jones Newswires
July 12, 2024 00:07 ET (04:07 GMT)
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