Shares of CITIC RESOURCES (01205.HK) rose nearly 9% during the morning session on March 6th. Such a significant gain is particularly noteworthy for a penny stock. This rebound in share price followed the company's disclosure of an asset disposal the previous evening.
**Two Disposals of Alcoa Shares Within the Year** On the evening of March 5th, CITIC RESOURCES announced that its wholly-owned subsidiary, CRA, had sold 1.9 million shares of Alcoa (AA.US) through a series of on-market transactions on the New York Stock Exchange on March 4th, 2026. The shares were sold at an average price of $62.451 per share, representing approximately 0.72% of Alcoa's total issued share capital. The total consideration for the transaction was approximately $119 million (about HK$926 million), excluding transaction costs.
Following this transaction, CRA still holds approximately 1.6919 million Alcoa CDIs (CHESS Depository Interests) and about 551,300 Alcoa shares, collectively representing approximately 0.86% of Alcoa's issued share capital. Prior to this sale, CITIC RESOURCES held approximately 1.58% of Alcoa through its holdings of Alcoa shares (traded on the NYSE) and Alcoa CDIs (traded on the ASX and convertible into Alcoa shares traded on the NYSE). The announcement indicated that the cumulative gain related to the Alcoa CDIs sold in this transaction was approximately $34.1 million (about HK$266 million).
The company plans to use the proceeds for general working capital and to reserve funds for potential future investment opportunities. The market responded positively to the news. On the morning of March 6th, CITIC RESOURCES' stock opened higher, reaching an intraday high of HK$0.61, a gain of 8.9%, marking a 52-week high. However, the gains narrowed during the session, and by the close of trading in Hong Kong, the company's share price stood at HK$0.57, up 1.79%, with a total market capitalization of approximately HK$4.479 billion.
CITIC RESOURCES has struggled to shed its "penny stock" label for years, with its share price consistently trading below HK$1. It is noteworthy that this sale represents the second time CITIC RESOURCES has reduced its stake in Alcoa this year. On January 16th, CITIC RESOURCES announced that on January 14th and 15th, 2026, CRA had sold 3.8166 million Alcoa shares through on-market transactions on the NYSE at an average price of $64.75 per share. These shares originated from the conversion of 3.8166 million Alcoa CDIs previously held by the company, corresponding to approximately 1.45% of Alcoa's equity. The total consideration for that transaction was approximately $247 million (about HK$1.927 billion), also excluding transaction costs. Influenced by this news, CITIC RESOURCES' share price surged 26.83% on January 16th, closing at HK$0.52. Combined, these two transactions over consecutive months have realized approximately HK$2.853 billion for CITIC RESOURCES.
**A Cross-Border Investment Spanning Over a Decade** The capital relationship between CITIC RESOURCES and Alcoa dates back over a decade. Between 2013 and 2016, CITIC Group and CITIC RESOURCES continuously acquired and increased their stake in the Australian listed company Alumina Limited (ASX: AWC), gradually raising their combined shareholding to 19.06% and becoming the largest shareholder. In 2020, due to non-participation in a dividend reinvestment plan, CITIC RESOURCES' stake in AWC decreased to 9.61%, while the combined holdings of CITIC-affiliated entities fell to 18.92%, making them the second-largest shareholder.
This situation changed significantly in 2024. That year, Alcoa acquired all shares of AWC through a share issuance and exchange offer, with each AWC share exchanged for 0.02854 Alcoa shares. Through holding Alcoa CDIs listed on the ASX, former AWC shareholders could continue trading on the ASX. Following the share exchange, the former AWC shareholders collectively held approximately 31.56% of the new Alcoa, with CITIC RESOURCES holding a corresponding stake of approximately 3.03%. This meant that CITIC RESOURCES' original investment in the alumina industry via AWC was transformed into a direct equity investment in Alcoa. The recent successive disposals are viewed by the market as a process of gradually realizing gains from this cross-border investment.
The timing of CITIC RESOURCES' two disposals appears particularly astute. Over the past year, Alcoa's share price has accumulated a gain of approximately 85.67%. When CITIC RESOURCES made its first disposal in mid-January, Alcoa's closing price had already risen above $65, a high level in recent years. On the day of the second disposal on March 4th, Alcoa's share price reached an intraday high of $68.40, setting a new 52-week high. To some extent, CITIC RESOURCES executed these disposals near阶段性 highs, demonstrating skillful market timing.
According to its corporate website, CITIC RESOURCES was listed on the Hong Kong Stock Exchange in 1997. Its business covers the exploration, development, and production of oil and coal, alongside investments and operations in bauxite mining, alumina refining, the primary aluminum smelting industry chain, and oil and gas trading. Currently, CITIC Limited (00267.HK) holds approximately 59.5% of CITIC RESOURCES, making it the largest shareholder.
In terms of financial performance, the company's revenue scale has expanded in recent years, but profitability fluctuations remain evident. In 2024, CITIC RESOURCES achieved revenue of HK$9.498 billion, a year-on-year increase of 148.27%; attributable profit was HK$573 million, up 3.77% year-on-year. For the first half of 2025, the company reported revenue of HK$9.382 billion, a surge of 137.85% year-on-year; however, attributable profit was approximately HK$152 million, a decrease of 57.05% compared to the same period last year. According to the company's schedule, CITIC RESOURCES will disclose its full-year 2025 results on March 13th. The market will then have a more complete view of the operational performance of this energy and resources enterprise over the past year. Whether the annual report will provide another catalyst for market sentiment towards this penny stock remains to be seen.
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