中国铝业回应投资者关切;重申对红桥和中铝的买入评级

China Aluminum Addressing Investor Concerns; Reiterate Buy on Hongqiao and Chalco CITI’S TAKEAccording to mysteel, China operating aluminum capacity is 45.3mntpa on 22ndJun 2026 and total aluminum output is expected to reach 45.4mnt in 2026E considering possible slight overproduction. The NBS’smonthly aluminum output data is more spiky than SMM and Mysteeeldata hence less used by industry participants. Citi commodity teamremains bullish on aluminum and expects average aluminum price at~US$4,000/t in 3Q26E. We see aluminum price and margins will stay Jack Shang, CFAAC+852-2501-2441jack.shang@citi.com Anna Wang+852-2501-2739anna.d.wang@citi.com Jimmy Feng+852-2501-7588jimmy.feng@citi.com China capacity –According to mysteel, China operating aluminum capacity is45.3mntpa on 22ndJun 2026 and total aluminum output is expected to reach 45.4mnt in 2026E considering possible slight overproduction. Investors’ concerns of48mntpa capacity was based on annualized China aluminum output in Apr 2026reported by NBS. However, mysteel expects aluminum output data reported by NBSwas more fluctuated and could be misleading as the annualized China aluminumoutput in May 2026 reported by NBS decreased to 45.8mntpa. In addition, themonthly operating capacity calculated from NBS’s output data since Mar 2025 hasbeen fluctuated and even decreased MoM at some months, which is different from Cynthia Wu+852-2868-7813cynthia.d.wu@citi.com Overseas aluminum inventory and capacity –Mysteel expects the aluminuminventory in the Middle East that could be transported out after the reopening ofStrait of Hormuz is less than 400kt. For Indonesia capacity addition, mysteel expectspower supply is a key focus in addition to the construction of aluminum capacity. Ittakes time for the construction of power units and the ramp-up of aluminumcapacity. Mysteel expects total overseas aluminum capacity addition at 1.85mntpa in Remain bullish on aluminum price –Citi commodity team remains bullish onaluminum and expects average aluminum price at ~US$4,000/t in 3Q26E as Strait ofHormuz reopening stabilizes demand faster than it restores supply. Citi commodityteam expects the aluminum market as being in a genuine deficit phase of ~2Mt Reiterate Buy on Hongqiao and Chalco –We see aluminum price and margins to stay higher for longer and the strong free cashflows to continue to support dividends and buybacks for equities. We see the weakness as an enhanced opportunity to buyshares. Maintain Buy on both Hongqiao and Chalco with attractive valuation. Aluminum Corporation of China(601600.SS; Rmb9.86; 1; 22 Jun 26; 15:00) ValuationOur target price for the Chalco A-share of Rmb17.24/sh is based on 3.28x 2026E PB, set at 2SD above the historical average of 1.86x as we expect stronger-than-historical-average 2026-27E ROEs, benefitting from higher aluminum price. Risks Downside risks that could impede the stock from reaching our target price are: 1) lower-than-expected aluminum and aluminaprices; 2) higher-than-expected costs; 3) higher-than-expected impairment loss; and 4) the Chinese government may loosenits supply cut policies if aluminum prices overshoot. Aluminum Corporation of China(2600.HK; HK$8.58; 1; 22 Jun 26; 16:10) ValuationOur target price of HK$17.08/sh for the Chalco H-share is based on 2.83x 2026E PB, set at 2.25x SD above the historical average of 1.27x to reflect stronger-than-historical-average 2026-27E ROEs, benefitting from higher aluminum price. Risks Downside risks that could impede the stock from reaching our target price are: 1) Lower-than-expected aluminum and aluminaprices; 2) Higher-than-expected costs; 3) Higher-than-expected impairment loss; and 4) The Chinese government may loosenits supply cut policies if aluminum price overshoots. China Hongqiao(1378.HK; HK$22.76; 1; 22 Jun 26; 16:10) ValuationOur target price for Hongqiao of HK$48.0/sh is based on 13.0x 2026E PE, set at China peers average. Our target price implies 2.7x 2026E PB and 12.9x 2026E PE. Risks Major risks that could impede Hongqiao from reaching our target price include: 1) cost and capex overruns; 2) higher-than-expected capacity addition in the industry; and 3) a significant slowdown in the Chinese economy. If you are visually impaired and would like to speak to a Citi representative regarding the detailsof the graphics in this document, please call USA 1-888-500-5008 (TTY: 711), from outside the Appendix A-1 ANALYST CERTIFICATIONThe research analysts primarily responsible for the preparation and content of this research report are either (i) designated by “AC” in the author block or (ii) listed in bold alongside content which is attributable to that analyst. If multiple ACanalysts are designated in the author block, each analyst is certifying with respect to the entire research report other than(a) content attributable to another AC certifying analyst listed in bold alongside the content and (b) views expressed solelywith respect to a specific