JP Morgan Chase cut rating of Chalco to neutral

JP Morgan Chase cut rating of Chalco to neutral due to a prudent opinion toward the aluminium prospect in the coming two quarters.

Besides, the bureau cut the target price by 40% to 5.2 HKD from 8.70 HKD.

According to the Mental Research Group of the bureau, aluminium price of LME of 2009 will cut by 12% to 2,400 dollar/ton in H2 which will be 9% down than 2008 H2.

In addition, smelters do not have any profit in the present 14,300 yuan, cause average cost in the industry is 15,500 yuan. Chalco, it is predicted, will loss 0.09 yuan per share in 2008 Q4. The company will go on losing money if the demand does not change for the better in 2009 H1. Chalco increased 8.1% to 3.08 HKD.

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