According to Citigroup in "The Big Banks," the acquisition by CHALCO is expected to increase aluminum production capacity by 6%, maintaining its industry preference

Citigroup's research report indicates that China Aluminum (02600.HK) plans to establish a joint venture to acquire 446 million shares of common stock in Brazil Aluminum held by Waterland for approximately RMB 6.286 billion in cash. Additionally, the joint venture will initiate a mandatory tender offer for all remaining publicly traded shares of Brazil Aluminum in accordance with regulations and intends to launch a delisting offer simultaneously with the mandatory tender offer, although it may reassess the plan for the delisting offer after the completion of the aforementioned acquisition of control.

The report states that based on the annualized net profit of the target company for the first nine months of 2025, the implied price-to-earnings ratio for the acquisition price is approximately 13 times the forecast for 2025. Considering that aluminum prices are expected to strengthen compared to the same period last year in 2026, the acquisition price is attractive.

At the same time, the report anticipates that this potential acquisition will bring an annual aluminum production capacity of 430,000 tons to China Aluminum, implying a capacity growth of approximately 6%. It maintains China Aluminum as the industry preferred choice, with a target price of HKD 15.94 and a "Buy" rating