Chalco Jumps on Promising Outlook Despite Estimated H1 Losses

BEIJING, July 28 -- The H-share of China's top aluminum producer Chalco surged more than four percent Wednesday despite the company's estimation of losses in the first half year, as the market generally holds positive outlook for the stock in the third quarter.

    Chalco touched the bottom of 8.49 HK dollars during the morning session, but then quickly climbed to the intra-day peak of 9.35 HK dollars before slipping back to close at 9.21 HK dollars, up 4.42 percent.

    Chalco estimated on Monday that it would incur net losses in the first half year due to faltering demand and sliding aluminum prices.

    However, Chalco's half-year losses are within market expectation, and analysts predict the company will reverse losses into gains in the third quarter.

    ICEA suggested investors add positions for Chalco if the price falls back to 6.98 HK dollars as the aluminum maker's fundamentals are on the mend.

    The bank added that Chalco's price to book ratio has reached 1.89, the highest point since 2002. It forecasted the stock will follow the market trend and go ahead for a correction.

    Chalco A-share added 8.05 percent to close at 19.33 yuan Monday, following a limit-up surge of 10 percent last Friday. The stock has soared 50 percent in just ten trading days to Monday.

    (Source: chinamining.org)