Aluminum Corporation of China (Chalco) announced its 3Q 09 results on 27 October 2009. While revenues experienced a moderate decline due to lower realized prices on aluminum sales, falling input costs and company’s cost saving efforts improved earnings during the quarter. As the results are broadly in line with our expectations, our fundamental outlook for the company remains unchanged. However, considering the increase in common stock price since our last update we downgrade the stock from a HOLD to SELL. We will reassess our rating in our next update report. The Hong Kong dollar is currently pegged to the US dollar. Therefore, no currency impact is expected on the ADR over the coming 6-12 months. In line with our fundamental outlook, we downgrade the ADR rating (1 ADR = 25 common share) from a HOLD to a SELL. We will reassess our rating in our next update report.

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