According to a report published by Shenyin Wanguo, China's Qin Fa (00866-HK) was given a target price of HK$2.95, a 7% premium over the market price.

According to Shenyin Wanguo, Qinfa Group is currently the largest private coal trader in China; its profitability is closely related to the two factors of coal purchase and resale price difference (not absolute coal price) and coal trade volume. Compared with coal mining enterprises, Qinfa has a lower gross margin and a higher asset turnover ratio.

Shenyin Wanguo expects that Qin Fa's profits will be severely impacted by the economic downturn due to weak downstream demand. According to estimates, assuming that trade volume falls 7% and the price spread remains unchanged, Qin Fa's profit per share will fall 27% year over year to RMB 0.33.

China's Qin Fa, which was listed and traded on the first day, went high. The increase in stock price compared to the issue price of HK$2.52 has now increased to 9.13%. It is now reported at HK$2.75, but it is still lower than yesterday's dark trading price of HK$283, with 180 million shares traded.