Intrinsic value of Aluminum Corp. of China ADR - ACH

Previous Close

$11.14

  Intrinsic Value

$3,205

stock screener

  Rating & Target

str. buy

+999%

Previous close

$11.14

 
Intrinsic value

$3,205

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of ACH stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  31.10
  28.49
  26.14
  24.03
  22.12
  20.41
  18.87
  17.48
  16.24
  15.11
  14.10
  13.19
  12.37
  11.63
  10.97
  10.37
  9.84
  9.35
  8.92
  8.53
  8.17
  7.86
  7.57
  7.31
  7.08
  6.87
  6.69
  6.52
  6.37
  6.23
Revenue, $m
  35,684
  45,850
  57,836
  71,733
  87,603
  105,484
  125,390
  147,312
  171,228
  197,104
  224,897
  254,561
  286,054
  319,335
  354,368
  391,130
  429,603
  469,782
  511,675
  555,299
  600,684
  647,873
  696,919
  747,886
  800,851
  855,899
  913,127
  972,642
  1,034,560
  1,099,006
Variable operating expenses, $m
  33,547
  43,042
  54,237
  67,217
  82,040
  98,741
  117,333
  137,809
  160,148
  184,316
  210,058
  237,765
  267,180
  298,264
  330,987
  365,322
  401,257
  438,785
  477,914
  518,659
  561,050
  605,125
  650,935
  698,539
  748,009
  799,425
  852,878
  908,466
  966,298
  1,026,492
Fixed operating expenses, $m
  498
  509
  520
  531
  543
  555
  567
  580
  592
  605
  619
  632
  646
  660
  675
  690
  705
  721
  736
  753
  769
  786
  803
  821
  839
  858
  876
  896
  915
  936
Total operating expenses, $m
  34,045
  43,551
  54,757
  67,748
  82,583
  99,296
  117,900
  138,389
  160,740
  184,921
  210,677
  238,397
  267,826
  298,924
  331,662
  366,012
  401,962
  439,506
  478,650
  519,412
  561,819
  605,911
  651,738
  699,360
  748,848
  800,283
  853,754
  909,362
  967,213
  1,027,428
Operating income, $m
  1,640
  2,299
  3,079
  3,984
  5,020
  6,188
  7,489
  8,923
  10,488
  12,183
  14,220
  16,164
  18,228
  20,410
  22,707
  25,118
  27,641
  30,277
  33,025
  35,887
  38,865
  41,962
  45,181
  48,526
  52,002
  55,616
  59,373
  63,281
  67,347
  71,579
EBITDA, $m
  5,753
  7,524
  9,612
  12,035
  14,803
  17,924
  21,399
  25,227
  29,404
  33,924
  38,779
  43,962
  49,465
  55,281
  61,404
  67,829
  74,554
  81,577
  88,900
  96,526
  104,460
  112,710
  121,284
  130,195
  139,455
  149,080
  159,087
  169,494
  180,321
  191,590
Interest expense (income), $m
  803
  841
  1,242
  1,723
  2,291
  2,949
  3,701
  4,548
  5,491
  6,530
  7,662
  8,888
  10,205
  11,610
  13,102
  14,678
  16,337
  18,079
  19,901
  21,804
  23,789
  25,855
  28,005
  30,240
  32,564
  34,978
  37,487
  40,094
  42,805
  45,624
  48,557
Earnings before tax, $m
  798
  1,057
  1,356
  1,693
  2,070
  2,487
  2,941
  3,432
  3,959
  4,520
  5,332
  5,960
  6,618
  7,308
  8,029
  8,780
  9,562
  10,375
  11,220
  12,098
  13,010
  13,957
  14,940
  15,962
  17,025
  18,130
  19,279
  20,476
  21,723
  23,022
Tax expense, $m
  216
  286
  366
  457
  559
  671
  794
  927
  1,069
  1,220
  1,440
  1,609
  1,787
  1,973
  2,168
  2,371
  2,582
  2,801
  3,030
  3,267
  3,513
  3,768
  4,034
  4,310
  4,597
  4,895
  5,205
  5,529
  5,865
  6,216
Net income, $m
  583
  772
  990
  1,236
  1,511
  1,815
  2,147
  2,505
  2,890
  3,300
  3,893
  4,350
  4,831
  5,335
  5,861
  6,409
  6,980
  7,574
  8,191
  8,832
  9,497
  10,188
  10,906
  11,652
  12,428
  13,235
  14,074
  14,947
  15,857
  16,806

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  39,127
  50,275
  63,417
  78,654
  96,056
  115,662
  137,489
  161,526
  187,751
  216,123
  246,597
  279,124
  313,656
  350,148
  388,562
  428,870
  471,056
  515,112
  561,047
  608,881
  658,645
  710,387
  764,165
  820,051
  878,126
  938,486
  1,001,236
  1,066,494
  1,134,386
  1,205,051
Adjusted assets (=assets-cash), $m
  39,127
  50,275
  63,417
  78,654
  96,056
  115,662
  137,489
  161,526
  187,751
  216,123
  246,597
  279,124
  313,656
  350,148
  388,562
  428,870
  471,056
  515,112
  561,047
  608,881
  658,645
  710,387
  764,165
  820,051
  878,126
  938,486
  1,001,236
  1,066,494
  1,134,386
  1,205,051
Revenue / Adjusted assets
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
  0.912
Average production assets, $m
  19,484
  25,034
  31,579
  39,166
  47,831
  57,594
  68,463
  80,432
  93,491
  107,619
  122,794
  138,991
  156,186
  174,357
  193,485
  213,557
  234,563
  256,501
  279,375
  303,193
  327,974
  353,739
  380,518
  408,346
  437,265
  467,321
  498,567
  531,063
  564,870
  600,057
Working capital, $m
  2,212
  2,843
  3,586
  4,447
  5,431
  6,540
  7,774
  9,133
  10,616
  12,220
  13,944
  15,783
  17,735
  19,799
  21,971
  24,250
  26,635
  29,127
  31,724
  34,429
  37,242
  40,168
  43,209
  46,369
  49,653
  53,066
  56,614
  60,304
  64,143
  68,138
Total debt, $m
  22,998
  31,916
  42,430
  54,620
  68,541
  84,226
  101,687
  120,917
  141,897
  164,594
  188,974
  214,996
  242,621
  271,814
  302,546
  334,792
  368,541
  403,786
  440,534
  478,801
  518,612
  560,006
  603,029
  647,737
  694,197
  742,485
  792,685
  844,891
  899,205
  955,737
Total liabilities, $m
  31,302
  40,220
  50,734
  62,923
  76,845
  92,530
  109,991
  129,221
  150,200
  172,898
  197,278
  223,300
  250,925
  280,118
  310,849
  343,096
  376,844
  412,090
  448,838
  487,104
  526,916
  568,310
  611,332
  656,040
  702,501
  750,789
  800,989
  853,195
  907,509
  964,041
Total equity, $m
  7,825
  10,055
  12,683
  15,731
  19,211
  23,132
  27,498
  32,305
  37,550
  43,225
  49,319
  55,825
  62,731
  70,030
  77,712
  85,774
  94,211
  103,022
  112,209
  121,776
  131,729
  142,077
  152,833
  164,010
  175,625
  187,697
  200,247
  213,299
  226,877
  241,010
Total liabilities and equity, $m
  39,127
  50,275
  63,417
  78,654
  96,056
  115,662
  137,489
  161,526
  187,750
  216,123
  246,597
  279,125
  313,656
  350,148
  388,561
  428,870
  471,055
  515,112
  561,047
  608,880
  658,645
  710,387
  764,165
  820,050
  878,126
  938,486
  1,001,236
  1,066,494
  1,134,386
  1,205,051
Debt-to-equity ratio
  2.940
  3.170
  3.350
  3.470
  3.570
  3.640
  3.700
  3.740
  3.780
  3.810
  3.830
  3.850
  3.870
  3.880
  3.890
  3.900
  3.910
  3.920
  3.930
  3.930
  3.940
  3.940
  3.950
  3.950
  3.950
  3.960
  3.960
  3.960
  3.960
  3.970
Adjusted equity ratio
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  583
  772
  990
  1,236
  1,511
  1,815
  2,147
  2,505
  2,890
  3,300
  3,893
  4,350
  4,831
  5,335
  5,861
  6,409
  6,980
  7,574
  8,191
  8,832
  9,497
  10,188
  10,906
  11,652
  12,428
  13,235
  14,074
  14,947
  15,857
  16,806
Depreciation, amort., depletion, $m
  4,114
  5,224
  6,533
  8,050
  9,783
  11,736
  13,910
  16,304
  18,915
  21,741
  24,559
  27,798
  31,237
  34,871
  38,697
  42,711
  46,913
  51,300
  55,875
  60,639
  65,595
  70,748
  76,104
  81,669
  87,453
  93,464
  99,713
  106,213
  112,974
  120,011
Funds from operations, $m
  4,697
  5,996
  7,523
  9,287
  11,295
  13,551
  16,057
  18,809
  21,805
  25,041
  28,451
  32,149
  36,069
  40,206
  44,558
  49,121
  53,893
  58,874
  64,066
  69,470
  75,092
  80,936
  87,010
  93,322
  99,881
  106,699
  113,787
  121,160
  128,831
  136,817
Change in working capital, $m
  525
  630
  743
  862
  984
  1,109
  1,234
  1,359
  1,483
  1,604
  1,723
  1,839
  1,953
  2,063
  2,172
  2,279
  2,385
  2,491
  2,597
  2,705
  2,814
  2,926
  3,041
  3,160
  3,284
  3,413
  3,548
  3,690
  3,839
  3,996
Cash from operations, $m
  4,172
  5,366
  6,779
  8,425
  10,311
  12,443
  14,822
  17,450
  20,323
  23,436
  26,728
  30,309
  34,116
  38,143
  42,386
  46,842
  51,508
  56,383
  61,468
  66,766
  72,278
  78,010
  83,969
  90,162
  96,597
  103,286
  110,239
  117,470
  124,993
  132,822
Maintenance CAPEX, $m
  -2,970
  -3,897
  -5,007
  -6,316
  -7,833
  -9,566
  -11,519
  -13,693
  -16,086
  -18,698
  -21,524
  -24,559
  -27,798
  -31,237
  -34,871
  -38,697
  -42,711
  -46,913
  -51,300
  -55,875
  -60,639
  -65,595
  -70,748
  -76,104
  -81,669
  -87,453
  -93,464
  -99,713
  -106,213
  -112,974
New CAPEX, $m
  -4,634
  -5,551
  -6,544
  -7,587
  -8,665
  -9,763
  -10,868
  -11,970
  -13,058
  -14,128
  -15,175
  -16,197
  -17,195
  -18,171
  -19,128
  -20,072
  -21,006
  -21,938
  -22,873
  -23,819
  -24,780
  -25,765
  -26,779
  -27,828
  -28,919
  -30,056
  -31,247
  -32,495
  -33,807
  -35,188
Cash from investing activities, $m
  -7,604
  -9,448
  -11,551
  -13,903
  -16,498
  -19,329
  -22,387
  -25,663
  -29,144
  -32,826
  -36,699
  -40,756
  -44,993
  -49,408
  -53,999
  -58,769
  -63,717
  -68,851
  -74,173
  -79,694
  -85,419
  -91,360
  -97,527
  -103,932
  -110,588
  -117,509
  -124,711
  -132,208
  -140,020
  -148,162
Free cash flow, $m
  -3,432
  -4,082
  -4,772
  -5,478
  -6,187
  -6,887
  -7,565
  -8,212
  -8,822
  -9,390
  -9,970
  -10,446
  -10,877
  -11,265
  -11,614
  -11,927
  -12,210
  -12,468
  -12,705
  -12,928
  -13,141
  -13,349
  -13,558
  -13,770
  -13,991
  -14,223
  -14,472
  -14,739
  -15,027
  -15,340
Issuance/(repayment) of debt, $m
  7,423
  8,918
  10,514
  12,190
  13,921
  15,685
  17,461
  19,230
  20,979
  22,698
  24,380
  26,022
  27,625
  29,193
  30,731
  32,247
  33,748
  35,245
  36,748
  38,267
  39,812
  41,394
  43,022
  44,708
  46,460
  48,288
  50,200
  52,206
  54,314
  56,532
Issuance/(repurchase) of shares, $m
  1,275
  1,458
  1,639
  1,811
  1,969
  2,106
  2,218
  2,302
  2,355
  2,375
  2,202
  2,155
  2,075
  1,963
  1,822
  1,652
  1,457
  1,237
  996
  735
  456
  160
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  8,698
  10,376
  12,153
  14,001
  15,890
  17,791
  19,679
  21,532
  23,334
  25,073
  26,582
  28,177
  29,700
  31,156
  32,553
  33,899
  35,205
  36,482
  37,744
  39,002
  40,268
  41,554
  43,022
  44,708
  46,460
  48,288
  50,200
  52,206
  54,314
  56,532
Total cash flow (excl. dividends), $m
  5,267
  6,294
  7,381
  8,523
  9,703
  10,905
  12,115
  13,320
  14,512
  15,683
  16,611
  17,730
  18,823
  19,891
  20,939
  21,972
  22,995
  24,015
  25,039
  26,074
  27,126
  28,204
  29,465
  30,938
  32,469
  34,064
  35,729
  37,468
  39,287
  41,192
Retained Cash Flow (-), $m
  -1,858
  -2,229
  -2,628
  -3,047
  -3,480
  -3,921
  -4,365
  -4,808
  -5,245
  -5,674
  -6,095
  -6,505
  -6,906
  -7,298
  -7,683
  -8,062
  -8,437
  -8,811
  -9,187
  -9,567
  -9,953
  -10,348
  -10,756
  -11,177
  -11,615
  -12,072
  -12,550
  -13,052
  -13,578
  -14,133
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  3,409
  4,064
  4,753
  5,476
  6,222
  6,983
  7,749
  8,513
  9,267
  10,008
  10,517
  11,225
  11,917
  12,593
  13,257
  13,910
  14,558
  15,204
  15,852
  16,507
  17,174
  17,856
  18,709
  19,761
  20,854
  21,992
  23,179
  24,416
  25,708
  27,059
Discount rate, %
  8.00
  8.40
  8.82
  9.26
  9.72
  10.21
  10.72
  11.26
  11.82
  12.41
  13.03
  13.68
  14.37
  15.09
  15.84
  16.63
  17.46
  18.34
  19.25
  20.22
  21.23
  22.29
  23.40
  24.57
  25.80
  27.09
  28.45
  29.87
  31.36
  32.93
PV of cash for distribution, $m
  3,156
  3,459
  3,688
  3,842
  3,912
  3,897
  3,799
  3,626
  3,391
  3,107
  2,733
  2,409
  2,081
  1,761
  1,461
  1,187
  944
  734
  559
  415
  302
  213
  148
  101
  67
  43
  27
  16
  9
  5
Current shareholders' claim on cash, %
  76.6
  60.5
  49.1
  40.8
  34.6
  29.9
  26.3
  23.5
  21.3
  19.5
  18.2
  17.1
  16.3
  15.6
  15.0
  14.6
  14.2
  14.0
  13.8
  13.6
  13.6
  13.5
  13.5
  13.5
  13.5
  13.5
  13.5
  13.5
  13.5
  13.5

Aluminum Corporation of China Limited (Chalco) is an aluminum producer with operations in bauxite and coal mining, alumina refining and primary aluminum smelting. The Company operates through alumina segment, including the mining and purchasing of bauxite and other raw materials, and production and sale of alumina, as well as alumina-related products; primary aluminum segment includes the procurement of alumina, other raw materials, supplemental materials and electricity power, the production and sale of primary aluminum and aluminum-related products; trading segment is engaged in the trading of alumina, primary aluminum, other non-ferrous metal products, and crude fuels; energy segment includes coal mining and power generation, including conventional coal-fire power generation and renewable energy generation, such as wind power and photovoltaic power, and corporate and other operating segment includes corporate and other aluminum-related research, development, and other activities.

FINANCIAL RATIOS  of  Aluminum Corp. of China ADR (ACH)

Valuation Ratios
P/E Ratio 2862.6
Price to Sales 8
Price to Book 30.1
Price to Tangible Book
Price to Cash Flow 99.7
Price to Free Cash Flow 218.5
Growth Rates
Sales Growth Rate 16.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -32.9%
Cap. Spend. - 3 Yr. Gr. Rate -6%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 126.2%
Total Debt to Equity 291.3%
Interest Coverage 1
Management Effectiveness
Return On Assets 2.4%
Ret/ On Assets - 3 Yr. Avg. 2.3%
Return On Total Capital 0.3%
Ret/ On T. Cap. - 3 Yr. Avg. -3.5%
Return On Equity 1%
Return On Equity - 3 Yr. Avg. -14.4%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 7.3%
Gross Margin - 3 Yr. Avg. 3.3%
EBITDA Margin 9.7%
EBITDA Margin - 3 Yr. Avg. 6.5%
Operating Margin 4%
Oper. Margin - 3 Yr. Avg. 0.2%
Pre-Tax Margin 1.2%
Pre-Tax Margin - 3 Yr. Avg. -3.3%
Net Profit Margin 0.3%
Net Profit Margin - 3 Yr. Avg. -3.7%
Effective Tax Rate 24.2%
Eff/ Tax Rate - 3 Yr. Avg. -49.2%
Payout Ratio 0%

ACH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ACH stock intrinsic value calculation we used $27218.9767231 million for the last fiscal year's total revenue generated by Aluminum Corp. of China ADR. The default revenue input number comes from 0001 income statement of Aluminum Corp. of China ADR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ACH stock valuation model: a) initial revenue growth rate of 31.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8%, whose default value for ACH is calculated based on our internal credit rating of Aluminum Corp. of China ADR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Aluminum Corp. of China ADR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ACH stock the variable cost ratio is equal to 94.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $487 million in the base year in the intrinsic value calculation for ACH stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Aluminum Corp. of China ADR.

Corporate tax rate of 27% is the nominal tax rate for Aluminum Corp. of China ADR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ACH stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ACH are equal to 54.6%.

Life of production assets of 0 years is the average useful life of capital assets used in Aluminum Corp. of China ADR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ACH is equal to 6.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5967.11759371 million for Aluminum Corp. of China ADR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 4.99 million for Aluminum Corp. of China ADR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Aluminum Corp. of China ADR at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

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▶ Aluminum Prices Defy Gravity and Maintain the $2,000 Level   [Aug-23-17 09:07AM  Market Realist]
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▶ What Could Trumps Presidency Mean for Alcoa and Aluminum?   [Dec-16-16 09:05AM  Market Realist]
▶ What Do Chinas Aluminum Demand Indicators Suggest?   [Dec-15-16 10:35AM  Market Realist]
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▶ Alcoas Aluminum Production: What Investors Can Expect   [Nov-21-16 03:04PM  at Market Realist]
▶ Can Higher Chinese Aluminum Exports Spoil Alcoas Party?   [Nov-09-16 10:14AM  at Market Realist]
▶ 3 Top Aluminum Stocks to Buy in 2016   [Oct-05-16 11:22AM  at Motley Fool]
▶ Chinalco to Take Mining Unit Private, Pay 32% Premium   [Sep-24-16 01:49AM  at Bloomberg]
▶ What Challenges Could Alcoas Post-Split Upstream Business Face?   [Sep-21-16 10:05AM  at Market Realist]
▶ 10 China Stocks With Earnings Growth   [Aug-30-16 05:48PM  at Barrons.com]
▶ Alcoa: Doing a Solid   [Jul-12-16 10:06AM  at Barrons.com]
▶ ALUMINUM CORP OF CHINA LTD Financials   [01:04PM  EDGAR Online Financials]
▶ (AA) Who are Alcoa's Main Competitors?   [Apr-16-16 04:48PM  at Investopedia]

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