**Key Takeaways** Aluminum Corporation of China Limited (CHALCO) released its Q3 2025 financial report, posting revenue of RMB 176.516 billion, up 1.57% year-on-year (YoY). Net profit attributable to shareholders reached RMB 10.872 billion, a 20.65% YoY increase, while adjusted net profit rose 23.03% to RMB 10.716 billion.

**1. Production Expansion Fuels Earnings Growth** In the first three quarters of 2025, CHALCO reported higher output across key products: - Metallurgical-grade alumina: 13.04 million tons (+3.74% YoY), with external sales of 4.91 million tons (+2.94% YoY). - Specialty alumina: 3.27 million tons (+0.62% YoY). - Primary aluminum (including alloys): 6 million tons (+6.76% YoY). - Coal: 9.85 million tons (+1.13% YoY).

Price trends diverged: domestic alumina futures averaged 12.91% lower YoY, while aluminum futures rose 3.25%.

**2. Cost Control and Rare Metals Venture** Improved cost management lifted profitability, with gross and net margins up 2.08 ppts and 1.15 ppts YoY, respectively. Operating expense ratios declined across sales, administration, and finance.

In August 2025, CHALCO announced a joint venture with parent Chinalco Group and affiliates (including Yunnan Copper and Chihong Zinc & Germanium) to extend rare metals supply chains. CHALCO will invest RMB 300 million for a 20% stake.

**3. Earnings Forecast and Rating** As China’s aluminum industry leader with strong upstream resource security, CHALCO’s 2025–2027 net profit projections are revised to RMB 14.553/16.036/17.076 billion under a neutral scenario (EPS: RMB 0.85/0.93/1.00). At 11.68x 2025 P/E (below peers), the "Overweight" rating is maintained.

**Risks Highlighted**: - **Resource supply**: Declining domestic bauxite reserves and stricter mining regulations may strain procurement. Overseas operations face geopolitical and labor risks. - **Safety/environmental compliance**: High energy use and emissions expose the sector to regulatory penalties. - **Global operations**: Policy instability (e.g., Guinea’s bauxite exports) and compliance risks abroad. - **Market competition**: Price volatility and intense rivalry could pressure margins. - **Project delays**: Slower-than-expected progress may dent output targets.