China Aluminum International Engineering Corporation Limited Class H (2068) AI Stock Analysis

• Market Cap: HK$18.73B
• Dividend Yield: N/A
• Average Volume (3M): 24.50M
• Price to Earnings (P/E): 79.8
• Beta (1Y): 0.70
• Revenue Growth: -1.75%
• EPS Growth: N/A
• Country: HK
• Employees: 10,853
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): >-0.01
• Shares Outstanding: 399,476,000
• 10 Day Avg. Volume: 7,504,850
• 30 Day Avg. Volume: 24,498,405
• PEG Ratio: -0.21
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.21
• P/FCF Ratio: -1.85
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 44 Neutral
• Price Target: HK$2.50 ▲(7.30% Upside)

The score is held down primarily by weak financial performance (high leverage and poor cash generation) and a very high P/E valuation. These are only partly offset by moderately positive technical momentum (price above major moving averages with positive MACD).

Positive Factors

Market leadership in aluminum engineering

Specialization and a strong reputation in aluminum engineering suggest durable competitive positioning. Deep sector expertise and track record in large EPC projects improve the firm's ability to win complex mandates, sustain client relationships, and capture recurring contract opportunities over multiple cycles.

Diversified EPC, consulting and equipment sales

A multi‑pronged revenue model—engineering, procurement, construction management, consulting and equipment sales—reduces reliance on any single income stream. This structural diversification helps smooth project-driven volatility and creates cross‑sell synergies that support steadier long‑term cash generation.

Improving gross profit margin

A gradual improvement in gross margin signals operational efficiency gains on contracts and project execution. If sustained, these gains can translate into higher sustainable operating margins, better competitive bidding flexibility, and an enhanced ability to absorb cost pressures across future multi‑year projects.

Negative Factors

Very high leverage (debt heavy)

Extremely high leverage materially raises financial risk: interest obligations and covenant pressure constrain strategic flexibility, limit the ability to self‑fund projects, and increase vulnerability to market or sector downturns. Deleveraging will likely require sustained cash generation or asset sales.

Negative operating and free cash flow

Persistent negative operating and free cash flow undermines the firm’s capacity to fund working capital and capex internally. Over time this forces reliance on external financing, heightens refinancing risk given high leverage, and can limit investment in capabilities needed to sustain growth.

Weak revenue trend and low profitability

A slight revenue decline/weak growth combined with low net margins suggests structural demand or execution pressures. Sustained weak top‑line and thin profitability erode returns on equity, hinder deleveraging, and reduce funds available for reinvestment, threatening long‑term competitiveness.

China Aluminum International Engineering Corporation Limited Class H Business Overview & Revenue Model

Company Description

China Aluminum International Engineering Corporation Limited Class H (2068) is a leading engineering and construction company based in China, specializing in the aluminum industry. The company provides a range of services including project design, engineering, procurement, and construction management for aluminum production facilities. It operates primarily in the sectors of metallurgy, chemical engineering, and environmental engineering, catering to both domestic and international clients. The company is known for its innovative solutions and has established a strong reputation in the aluminum sector, contributing to the modernization and efficiency of aluminum production processes.

How the Company Makes Money

The company generates revenue primarily through the execution of large-scale engineering and construction projects, particularly in the aluminum industry. Its revenue model is based on contract fees charged for project management, engineering services, and construction activities. Key revenue streams include project contracts, consulting services, and the sale of technology and equipment used in aluminum production. Additionally, the company benefits from partnerships with other firms in the aluminum sector, which can enhance its capabilities and reach. Factors contributing to its earnings include the growing demand for aluminum in various industries, government investments in infrastructure, and the company's capacity to secure contracts for new projects both domestically and overseas.

China Aluminum International Engineering Corporation Limited Class H Financial Statement Overview

Summary

Financial strength is weak: modest revenue growth is offset by low profitability, very high leverage (debt-to-equity above 6), and negative operating cash flow with negative free cash flow growth.

Income Statement

The company shows modest revenue growth in the TTM period, but profitability is a concern with low net profit margins and fluctuating EBIT margins. The gross profit margin has improved slightly over the years, indicating some operational efficiency. However, the overall profitability remains weak, impacting the income statement score.

Balance Sheet

The balance sheet reveals high leverage with a debt-to-equity ratio exceeding 6 in the TTM period, indicating significant financial risk. The return on equity is low, reflecting limited profitability relative to shareholder equity. The equity ratio is also low, suggesting heavy reliance on debt financing, which poses a risk in volatile markets.

Cash Flow

The cash flow statement shows negative free cash flow growth and negative operating cash flow, indicating cash management challenges. The operating cash flow to net income ratio is negative, highlighting inefficiencies in converting income to cash. Despite a high free cash flow to net income ratio, the overall cash flow position is weak, affecting the score.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	23.08B	23.94B	22.22B	23.70B	23.90B	23.03B
Gross Profit	3.27B	3.03B	1.60B	3.02B	2.79B	2.07B
EBITDA	816.06M	1.01B	-2.32B	1.12B	-44.67M	-656.73M
Net Income	88.83M	221.18M	-2.66B	112.46M	―	-1.98B
Balance Sheet
Total Assets	41.92B	41.16B	40.94B	47.39B	58.83B	54.51B
Cash, Cash Equivalents and Short-Term Investments	4.72B	3.17B	4.76B	7.67B	7.65B	7.28B
Total Debt	17.93B	13.17B	8.97B	12.59B	20.87B	17.54B
Total Liabilities	36.68B	32.31B	33.69B	36.94B	42.31B	38.88B
Stockholders Equity	2.92B	6.58B	2.27B	7.53B	7.64B	8.73B
Cash Flow
Free Cash Flow	-610.31M	-2.77B	680.01M	-3.94B	-3.94B	-3.67B
Operating Cash Flow	-528.62M	-2.69B	731.59M	524.87M	734.22M	610.74M
Investing Cash Flow	-74.03M	662.39M	85.67M	-4.32B	-4.08B	-4.16B
Financing Cash Flow	933.54M	1.84B	-4.41B	3.87B	3.44B	1.03B

China Aluminum International Engineering Corporation Limited Class H Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.33
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2068, the sentiment is Negative. The current price of 2.33 is below the 20-day moving average (MA) of 2.71, below the 50-day MA of 2.58, and below the 200-day MA of 2.36, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 45.30 is Neutral, neither overbought nor oversold. The STOCH value of 28.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:2068.

China Aluminum International Engineering Corporation Limited Class H Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1599	70 Outperform	HK$1.85B	3.30	―	8.47%	-17.82%	-41.82%
2386	70 Outperform	HK$32.69B	11.98	8.27%	5.31%	11.89%	8.49%
2355	65 Neutral	HK$2.20B	11.56	1.40%	3.23%	-27.65%	-68.36%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1726	53 Neutral	HK$1.39B	-17.47	-68.32%	―	26.40%	-6.44%
2236	52 Neutral	HK$1.59B	5.71	9.56%	―	96.63%	―
2068	44 Neutral	HK$18.73B	79.81	3.35%	―	-1.75%	―