Investment highlights: We covered Jinzhou Port for the first time and gave it a “neutral” investment rating. The strategic location as a coal gateway to the East Mongolia region and expectations for further integration from the Dalian Port Group are the company's main investment lines, but the high valuation level shows that these two major growth stories are fully reflected in current stock prices. The Jinchi Railway will be completed in 2012 and is expected to bring in 100 million tons of coal throughput. However, since the increase in coal throughput is mainly brought about by the construction of new coal berths, the company's equity share is relatively small. It is estimated that in 2012, some of the profits attributable to Jinzhou Port were only about 0.11 million, which will reach 89 million yuan in 2015, which is equivalent to 5.5% and 44.1% of the predicted profit of Jinzhou Port in 2010, respectively, and the profit contribution in the short term is limited. Currently, the Dalian Port Group holds a total of 304 million shares of the company, with a share ratio of about 19.44%, second only to Oriental Group's 19.73%. We believe that the time is ripe for the Port of Dalian to acquire controlling shares from major shareholders; only the transfer price may pose an obstacle. At the same time, the Dalian Port Group also has the possibility of further expanding its shares by purchasing shares from the secondary market. Financial forecast: We expect the company's operating profit to increase by 18.0% or 0.3 billion yuan in 2010, mainly due to the increase in the company's cargo throughput (16 million) and the increase in handling rates (19 million). Profit in 2011 will drop 5.4% or $11 million year-on-year, mainly due to a sharp increase in financial expenses and depreciation expenses due to the completion of new container berths. In the long run, the compound growth rate of the company's operating net profit from 2009 to 2015 will reach 17.2%, driven by leaps and bounds in coal throughput growth starting in 2012. Valuation and suggestions: Currently, the company's DCF valuation and price-earnings ratio valuation show that the current stock price has overdrawn future profit growth, but the net market ratio valuation shows that Jinzhou Port still has some investment value as a strategically integrated resource. The Dalian Port Group's higher issuance price of 7.77 yuan for listed companies has brought some support to the current valuation level, and the gradual advancement of the Dalian Port Group's integration process may bring trending investment opportunities. Risk: Demand for coal handling and the uncertainty of Dalian Port's equity integration with Jinzhou Port.