Aluminum Corporation Of China (SEHK:2600) Posted Strong Half Year Earnings And A Dividend, Is It Cheap?

Dividend and earnings announcement draw fresh attention to Aluminum Corporation of China

Aluminum Corporation of China (SEHK:2600) has put income and earnings in focus after reporting half year results to June 2026, alongside an interim dividend of RMB 0.276 per share.

Recent trading tells a mixed story. The share price has climbed over the past week and month, with a 1-day share price return of 2.32% and 30-day share price return of 5.00%. However, the year-to-date share price return is down 28.56%. Longer term total shareholder returns of 40.29% over one year and 139.76% over three years indicate that investors in Aluminum Corporation of China have previously been rewarded for staying invested even through periods of weaker near term momentum.

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Aluminum Corporation of China has just paired a cash dividend with strong half year earnings and a short term share price bounce. Is that enough reason to commit fresh capital now, or is it better to wait for a clearer entry point?

Price-to-Earnings of 7.6x: Is it justified for Aluminum Corporation of China?

On the latest close at HK$9.03, Aluminum Corporation of China trades on a P/E of 7.6x, which points to a lower valuation tag than many peers when set against its earnings record and return profile.

The P/E ratio compares the current share price to profit per share. For a diversified materials group like Aluminum Corporation of China, investors often lean on this measure because earnings are a direct output of its large alumina, primary aluminum, energy, and marketing activities.

In this case, the current P/E of 7.6x sits well below both the Hong Kong Metals and Mining industry average of 11.2x and the peer average of 34.2x. That kind of gap suggests the market is assigning a discount despite the firm reporting high quality earnings, a 22.8% Return on Equity that is described as high, and profit growth over the past 5 years alongside improved net profit margins. The estimated fair P/E ratio of 9.4x is also higher than where the shares trade now, which indicates a higher level the valuation could move toward if sentiment and expectations were to align more closely with those fundamentals.

For a closer look at how this fair ratio is calculated and applied to Aluminum Corporation of China, check the Explore the SWS fair ratio for Aluminum Corporation of China.

Result: Price-to-Earnings of 7.6x (UNDERVALUED)

Still, Aluminum Corporation of China faces real pressure points, including exposure to cyclical metals pricing and heavy reliance on Mainland China for the bulk of its revenue.

Find out about the key risks to this Aluminum Corporation of China narrative.

Another view on Aluminum Corporation of China’s value

The P/E points to a discount, yet the SWS DCF model paints an even starker picture. On that approach, Aluminum Corporation of China at HK$9.03 is assessed against an estimated future cash flow value of HK$31.50, which frames the stock as heavily undervalued. How comfortable are you trusting a long range cash flow model over today’s earnings multiple?

For investors who want to see how that estimate is built step by step, the Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Aluminum Corporation of China for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 249 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Mixed signals around Aluminum Corporation of China can make the decision feel finely balanced. Use the detailed risk and reward breakdown to pressure test your own thesis quickly and decide where you stand using the 3 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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