Morgan Stanley: Maintains "overweight" rating on Aluminum Corporation of China (02600) with a target price of 7.1 Hong Kong dollars.

Morgan Stanley released a research report stating that Aluminum Corporation Of China (02600) previously announced that its net profit in the first quarter of this year is expected to increase by 53% to 63% year-on-year, reaching 3.4 billion to 3.6 billion yuan, exceeding market expectations. The improved profit performance mainly reflects the increased contribution of aluminum materials to profits. The rating for the company by the bank is "hold", with an H share target price of 7.1 Hong Kong dollars. The bank pointed out that, under the fluctuations in the global macroeconomic environment, the price of aluminum has recently experienced a significant correction, dragging down the company's stock performance. However, the fundamentals of aluminum remain solid, with supply limited by the capacity constraints set by the mainland government and demand remaining strong. This should provide solid support for aluminum prices. Combined with lower energy prices, the stable profit contribution of the aluminum plate sector can continue. In addition, the relatively matched aluminum oxide and aluminum production capacity, the continuously improving self-sufficiency rate of alumina, lower alumina costs in domestic and overseas markets, and strategic capacity layout should help the company weather the downturn in the alumina industry and ensure steady profits for this year.