Coal chemical industry has strong business strength: the company mainly produces a variety of chemical fertilizers, coal coke deep processing products and other chemical raw materials, of the existing 66 kinds of products, 21 are high-tech products, and more than 30 kinds have won national, ministerial and provincial high-quality product awards. The company has an annual production capacity of 150000 tons of PVC, 100000 tons of caustic soda, 20, 000 tons of ion-exchange membrane caustic soda and 20, 000 tons of nano-calcium carbonate. In addition, the first phase of the 300000-ton / year crude benzene hydrofining project jointly built by the company and Baosteel Group has been completed and put into production.

Give priority to coke deep processing and diversified development: in the company's business, coke and deep processing series account for the largest proportion, accounting for 41.73%, followed by ammonia series, accounting for 19.35%, crude benzene refining series accounting for 15.45%, platinum mesh accounted for 10.90%, polyvinyl chloride series accounted for 8.66%, chlor-alkali series accounted for 3.19%. At present, the company's main business is in North China and East China, and its sales revenue accounts for 60% and 26% of the company's total sales revenue respectively; in addition, the sales income of the top five customers is relatively concentrated, and the sales income of the top five customers accounts for 35% of the company's total sales revenue. The stability of customer demand will help the company to further open up the market in the future.

Company relocation to improve performance: the company has more than 700 mu of factory area, located in Taiyuan City in the future planning of business, culture, tourism center, huge room for appreciation. The revitalization plan of coal chemical industry in Shanxi Province clearly puts forward that Ethernet relocation is an opportunity to build an international first-class coal chemical industry park according to the co-production mode of coal, power, chemical and metallurgy. In the development planning of Taiyuan City, the relocation of the company is involved. We believe that under the premise that the government strongly supports the development of the company, as Shanxi is rich in coal resources, the government's compensation for the relocation of the company is likely to be implemented in coal resources.

Profit forecast and valuation: in 2009, the cumulative average selling price of key state-owned coal enterprises in Shanxi Province was 475 yuan / ton, and the average production cost was 258 yuan / ton. We expect that in the future, the average price of coal will increase by 5% per cent per year, and the cost of coal production will also rise slightly. Assuming that the government gives the company 3 million tons, 5 million tons and 7 million tons of coal production capacity as relocation consideration, without considering the coal chemical business, and assuming that the coal mines obtained by the company are average quality coal mines in Shanxi Province, the thickening performance EPS of the company can reach 0.58,0.97,1.36 yuan, respectively, according to the valuation of 15 times PE, this part of the coal business can be based on the company's existing stock price. The valuation can be increased by 8.75 yuan, 14.58 yuan and 20.41 yuan respectively. Investment advice: considering the uncertainty of the company's relocation consideration, the company is currently given a rating of "prudent recommendation".