CHALCO (02600) is projected to maintain robust profit growth through 2026, driven by favorable price outlooks, increased self-sufficiency in raw materials, and reduced external sales of alumina. The firm has received an Overweight rating with a target price of HK$17.7. CHALCO anticipates first-quarter 2026 net profit to rise between 50% and 58% year-on-year, reaching RMB 5.3 billion to RMB 5.6 billion, slightly exceeding the expected RMB 5.27 billion. Excluding one-time items, recurring profit increased by 49% to 58%, totaling RMB 5.1 billion to RMB 5.4 billion. The significant quarterly improvement was attributed to global supply disruptions boosting aluminum prices, higher bauxite self-sufficiency, and effective cost control. Additionally, the company announced that its controlling shareholder increased its stake by 1.13%, involving approximately RMB 1.015 billion. Recent domestic aluminum prices have fluctuated around RMB 24,000 per ton, pressured by weak Chinese demand and high inventories, despite supply disruptions of 3.6 to 3.7 million tons in the Middle East due to conflict. However, as Chinese demand recovers and overseas supply tightens, boosting export orders, inventories are expected to gradually decline, supporting a steady rebound in aluminum prices.
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