Aluminum Corp. of China Limited (ADR) (ACH)

It's been dramatic watching investors flee from this solid company, and I've been happy to buy their shares on the way down. I'm thinking we've already hit or will soon hit a bottom, and valuation looks very compelling here at just above $50. Need I point out the stock hit $90 just over a month ago? What's changed since then? Have long-term forecasts for China's growth changed substantially? No. In fact, the Chinese have announced steps like limiting credit to restrain growth and thus avoid a big bubble.

What has changed is the mindset of the American investor, who's risk tolerance has been shaken by the credit crunch and major red flags emerging from the financial sector which suggest an imminent recession in the US. But I see pulling out of a Chinese ADR and moving into some traditional safe haven asset like bonds as foolhardy, especially since US bond yields will not even keep pace with the REAL rate of inflation (which is much higher than what the Fed reports). ACH is about as low risk as one will find in today's markets. Their acquisution of Peru Copper last year was a great move for them (I had owned CUP and was very bullish on it). Their P/E is just over 4.25 right now... dirt cheap.

So, while investors have been hammering down Chinee ADRs lately, I'm gleefully watching the ones that relate to commodities and picking them up at a great discount. If more Americans would line up to buy stocks like ACH on black friday instead of waiting for Target to open its doors, then I feel more of us would be ready for the financial turmoil which lies ahead.

This looks to me like a nice profitable, growing company. Looking at some of the numbers I see Gross Margins of 37.43%, with Net Margins of 22.54%. Nice. Going along this company is clocking in growth rates of 28.5% sales with 51.9% earnings. I'd expect the earnings rate to drop considering the sales growth probably cannot sustain it for too long. Still looking good, though. They have a payout ratio of 44.6% which yield a 5.6% dividend. That's some fine icing on this growth. Considering all this, I'm surprised to see a low P/E of 7.94. This should outperform without much of a problem. Perhaps Chinese stocks will be getting bubbly soon but I certainly don't see it here. Not yet.

Fundamentals dont get much better than this. With a forward P/E of 5.90 makings its PEG .44 this stock is pretty cheap. It is still above its 50 day moving avg while being almost 40% off its high. Forcasted negative EPS growth for next quarter already factored into share price, while this is mostly due to expansion expenses. They have done this with a recent split. Previous NP growth was still 89%. They pay heavy dividends (expected 4%) and have solid capital with a 8.9 Billion cap. I wish insider ownership was higher here, but with current expansion they should utilize the growth opportunites in China and reach a higher intrinsic value. This one is a no brainer with the dividends and price relative to future earnings.

no clue

Being the 2nd largest alumina producer and one of the leading aluminum maker in the world, plus her owning huge reserve of bauxite, ACH is well-positioned as a leading intergrated aluminum business corporation.

Thanks to the massive urbanization projects and rapidly-rising demands for consumer products like autos, beverage, etc. in many developing countries, the demand for aluminum has been very robust for the past few years and will continue to keep strong over the next few years down the road. However, aluminum smelting is an energy-intensive process and energy cost is standing at record level, along with the rising price for alumina, leading many aluminum makers to cut their output level. Some recent news were that China might reduce her annual aluminum production by 300K tons, about 2% of the annual domestic demand in China at 15.1M tons; South Aferic would cut her output by 1.5M tons due to serious shortage in electricicty. These negative news on supply have push the aluminum prices up to a high in 9 months. Notably, the 15 months and 27 months futures have been higher than the spot price and the near term 3 month futures for almost one year, that were not seen in the years before, suggesting the aluminum price is still on a up trend.

In another development, ACH's parent company, Chinaclo, has been aggressively buying other mining asset outside the aluminum. In fact, Chinaclo is owning the most reserve of copper in China, outpacing Jiang Xi coppper - the most famous copper company in China. These moves will make Chinaclo to become a very major integrated mining company in the world. It is too early to say that Chinaclo will inject these asset to ACH, but if it does happen, it will be a huge boost on ACH. Investment should be full of dreaming and imagination!

This has gotten too cheap again. Bernanke will keep cutting rates until mid-summer, and we all know what that will do.

Long term this should be a excellent performer. I think a year or two out here we won't be looking back and saying $90 was the high. I see that aircraft orders are still way up, so there's still real increasing demand for aluminum out there. It's hard to ignore the downtrend in the overall markets, but I expect eventually we'll separate from the herd here soon. The numbers will just be too hard to ignore.

The largest producer of Aluminum and Alumina products in China, third largest in the world. The company has been growing rapidly, in line with the chinese economy. Aluminum and Alumina products are used in everything from technology and pharmaceuticals to construction and consumer products. CHALCO produces primary aluminum products for distribution, as well as selling bauxite ore (product that comes from the ground). CHALCO maintains control of its raw materials through sole proprietorship of eight bauxite mines, and is the primary operator of another 16 mines. Many of the smelting and production facilities (also run by CHALCO) are proximate to these mines, increasing productivity and driving down transportation costs. In 2001, Alcoa entered into a partnership with CHALCO, that also included an 8% stock ownership stake. A nice little dividend to keep you calm during any short term fluctuations.

Commodity boom is not over and China is not done growing and building. Huge discount from market turmoil has the P/E back to 10 with a 3% dividend yield. I'll take that in CAPS in the current market.

The Upside -- the numbers look good to me: PEG=0.89, Forward P/E=16.55 (a bit high for an alumina producing company; Kaiser Alum's is 14.45), Price/Sales & Price/Book both under 1.0 (meaning there's more Book Value than Share Value? Why hasn't the rest of the market seen at least this $9/shr difference?!), and excellent quarterly sales & earnings growth (72.7% & 44.2%, respectively).

The Risks: Can we really believe the growth rates attributed to China by our never-flagellated-enough anal-ysts? Probably not. But given the growth rate of its past and the momentum behind this stock (look at that 5-year chart!), even if half of the growth rate is true, this stock should continue to beat out the S&P 500. The other downside risk is the influence of the Chinese government. However, even that risk is mitigated in that they realize they need raw materials and processed alumina product to grow their military, if not the rest of their country.

Thanks to yippiekiyeh for pointing this one out to me.

ACH's chart is starting to look like an avalanche, and none of its technical indicators (or none that I could see) indicate any upcoming reversals of that trend (not the 10, 21, 50, or 200 Day Moving Averages, the short or long term MACD, the Relative Strength, the Bollinger Bands).

Sure makes me wish I had shorted it. For those considering getting in on the ACH bandwagon, I advise waiting for a clear shift in momentum. If ACH can solidly break 41.05 (a price with likely resistance), we could see it finally make a run for it, but for now, I would steer clear. Eventually, though, I think this could prove to be a very lucrative pick.

China Alminum is in position to exploit China's huge construction boom. Growing through expansion and overseas acquisitions. DOwn 40% over last 4 months because of issuance of more shares ( for acquisitions and expansion of capaity) as well as sell off of emerging markets. opportunity at 8 and forward p/e of ~6.. Nice dividend of ~ 4%. Also protection against dollar. Sweey combination.

ACH - look at the 52week chart. Industry Goliath in China with below average debt + P/E, and +3% dividends. After recently suspended trading, strong volume for 3 straight days. MTF also recently did an article doing a much better analysis than I could have. (Disc: I own ACH @ 20.90, buying before the MTF article came out, on the day it resumed trading. ACH represents 40% of my holdings.)

0% APR financing from the Chinese government should help ACH getting out of any financial difficulties it may encounter and financed many M&A in the near future. Even though I have seen falling ROE, ROA, and the increasing Debt over Equity, they have alittle meaning to the state-own company. I predict the company will outperform in the next two to four years conservatively even they report profit dropped in the first quarter as much as 50%. If the aluminum industry can pass the rising material cost to their customers(similar to what the steel industry have done), we should see higher margin of profit and stock price.

Overall, the company is expected to reach full-year profits of $1.5 billion this year, a nice 70% increase over last year.

Anyone got a time machine? 350% this year plus 2 dividends, hell how bout you say I bought some shares last October and give me the certificates for that price you can keep all the dividends. A little late on this one? Yes and No while we all would certainly love a 350% gain in our portfolio over a year or the 3000% percent over the past five assuming that yahoo's prices are right which I don't believe because there is no such thing as a 30 Bagger in 5 Years. I'd struggle to say that this one isn't a bit ahead of it's self but with a p/e of 5, it's getting held down by the future which I guess the market doesn't seem to thing looks all that great for ACH from here on. Maybe the run is over...or maybe it's just taking a break.

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=18352&t=01001910366851636576

time to buy this one after the beating. Look at the growth and tell me why this stock is not near its 52-week high???
It was in fashion and now it is out of fashion, but the fundamentals are really all that matters here. Same for many China stocks. This is a good buying opportunity.

Chinese markets are an interesting area and metal production will be needed for the developing country. Also, this company is vertically integrated with mining, refining, and smelting - this should make them more resistant to supply line issues.

As the world’s second largest aluminum producer, China Aluminum is a major beneficiary of China’s infrastructure build-out. The company is restructuring a couple of its subsidiaries to prepare for a listing on the red-hot Shanghai Stock Exchange this coming April.
EPS = 11.8
P/E = 1.99
Div = 3.04 (13%)

With a P/E of 6.8 and high yield 15.30%, I think this is a bargain right now. Even considering the competition from Alcoa, this company is expected to grow income, as the industrial demand for Alumina products in China continues to increase.