Performance is generally in line with expectations: the company achieved operating income of 2.45 billion yuan in the first three quarters of 2012, up 11.8% year on year, operating profit of 110 million yuan, up 12.2% year on year, total profit of 130 million yuan, up 5.4% year on year, net profit attributable to owners of the parent company of 86.4 million yuan, up 16.4% year on year, and basic earnings per share of 0.2537 yuan; from a quarterly perspective, the company achieved operating income of 810 million yuan in the third quarter, up 21.4% year on year. Total profit was 67.05 million yuan, up 406.2 million yuan %, net profit attributable to owners of the parent company was 35.1 million yuan, up 178.3% from the previous year, and achieved basic earnings of 0.1,031 yuan per share; it was basically in line with expectations. Performance increased sharply month-on-month: Due to weak electricity demand, the decline in thermal power utilization in the third quarter of Northeast Power Grid increased month-on-month, but considering that Baiyinhua Power's electricity sales volume declined year-on-year due to unit overhaul in the first half of the year, and there were certain reissues in the second half of the year, the company's operating income in the third quarter rose 14.4% month-on-month. At the same time, the decline in coal prices caused the company's operating costs to increase by only 4.6% month-on-month, and the company's gross margin increased by 6.9 percentage points month-on-month, and the company's gross margin rose by 6.9 percentage points month-on-month. Other influencing factors: (1) Financial expenses: Due to the expansion of loan scale and interest rate increases, the company's financial expenses increased by 92.85 million yuan, an increase of 29.1%, weakening the company's profitability; (2) Investment income: The company's investment income increased by 37.9 million yuan, an increase of 83.7% over the same period, mainly due to the increase in coal revenue of the joint venture company Inner Mongolia Baiyin Huahaizhou Open Pit Coal Mine Co., Ltd., which increased its net profit over the same period. There is pressure on short-term performance: the second phase of the company's Baiyinhua power generation project is expected to be completed from 2013 to 2014, and Dandong Thermal Power is expected to be put into operation before the end of this year; at the same time, the shareholding subsidiary Haizhou Open Pit Coal Mine Plan has a scale of 5 million tons/year and the second phase of 10 million tons/year, eventually reaching the overall plan of 24 million tons/year. However, from a time perspective, the company's next explosive performance point is around 2014, and there is pressure on short-term performance. Giving a “Neutral-A” investment rating: Assuming that the company's additional distribution was completed in 2013, the company's 2012-2014 EPS is expected to be 0.38 yuan, 0.35 yuan, and 0.54 yuan respectively, corresponding to PE of 17.2 times, 18.5 times, and 12.0 times; considering the region where the company's power plants are located, the decline in electricity growth rate has been large, the decline in coal prices is small, and the company's performance elasticity is low among thermal power companies. Furthermore, there is pressure on the company's short-term performance, the investment rating was temporarily lowered to “Neutral-A”, with a target price of 6.5 yuan for 6 months. Risk warning: the decline in coal prices is lower than expected; utilization hours have declined sharply; construction work has been delayed; private issuance has been delayed, etc.