UBS maintains the International Coal Machine (1683.HK) buying rating, with a target price of HK$5.10. The company announced on Wednesday evening that it has agreed to acquire 100% of Qingdao Tianxun Electric's shares at a cost of approximately RMB 539 million. According to UBS, Qingdao Tianxun is a private company that mainly produces electronic control systems for tunneling machines and coal mining machines. The acquisition of international coal machinery is a major acquisition. Assuming that Tianxun can achieve a net profit of RMB 80 million in fiscal year 10, this transaction is equivalent to a price-earnings ratio of 6-7 times that of 2010. UBS pointed out that by the end of 2009, the audited book value of Qingdao Tianxun was 48 million yuan. The bank will re-review its forecast values after meeting with the company's management. UBS believes that this acquisition is consistent with the strategy of integrating the international coal machine value chain and will help the company further expand its profit margin. International Coal Machinery rose 0.57% throughout the day to close at HK$3.50.