Aluminum is crucial to economic growth. It serves to build several industrial products and equipment. This increased reliance of economy upon the aluminum has made aluminum stocks worth investing in for the last few years. Aluminum Corp. of China Ltd. (NYSE: ACH) is an aluminum stock that has greatly benefitted from this rise in demand for Aluminium. ACH is a multinational aluminum company and is based in Beijing. The company is the third-largest primary producer of aluminum across the globe. The demand for Aluminium during recent years has increased the profitability of the company as well as built up investor trust in ACH stock. However, more recent months have seen negative performance to an extent as well.
High Profits for ACH
Recently, ACH announced that its net income had soared by a staggering 564%in the year 2021. The company was able to pocket the net profits of $798.65 million during the said period. Hence, performance-wise, 2021 proved to be the best year for the company in the last 14 years. The increased profitability could be attributed in part to an unprecedented increase in the prices of Aluminium since the impacts of the COVID pandemic started subsiding and economies restarted. The average global prices of Alumina have jumped up more than 22% during 2021.
On the valuation side, ACH has an average trading volume of 142,727 shares, while it has a market capitalization of $7.82 billion. The risk of volatility for the company is significantly high, as evident from the beta value of 1.59. The price of the stock has grown 10 fold compared to earnings, as depicted by the P/E ratio of 10.54. This in turn translates to an excellent investment opportunity for the investors. The debt to equity ratio of 0.88 also represents an excellent picture of the financial condition of the company.
With the constantly increasing prices of every product in the global commodity market, the situation may not be pleasant for buyers but it does offer a sigh of relief for the developers who have a chance to improve their financials which plunged owing to COVID. ACH is no different. The increase in global aluminum prices has offset the investor interest in the stock, which would become more evident in near future.