Semi-annual report review: Profit mainly comes from investment income of the company's operating income of 1.64 billion yuan in the first half of the year, up 8% year on year, achieving a total profit of 48.97 million yuan, a year-on-year decrease of 53%; net profit attributable to the parent company was 51.3 million yuan, down 17% year on year. EPS for the first half of the year was 0.124 yuan and 0.027 yuan respectively. The performance was lower than our expectations. Higher fuel costs, lower gross profit for power generation, and increased financial expenses are the main reasons for the decline in the company's profits. The company's gross margin of power generation in the first half of the year was only 20.9%, a year-on-year decline of 3.2 PP. Financial expenses increased by 563,000 yuan, an increase of 26% over the previous year. The company's profit in the first half of the year mainly came from the company's investment income of 58.12 million yuan. Among them, the Baiyin Huahaizhou Open Pit Coal Mine brought investment income of 48.4 million yuan, an increase of 106% over the previous year; the investment income of Shenyang Huarun Thermal Power Co., Ltd. was 9.82 million yuan. Highlights of the second half of the year: The increase in performance mainly comes from the decline in coal prices. According to sensitivity analysis, for every 1% year-on-year decline in the company's coal price, the company's EPS will increase by 0.03 yuan/share in 2012, an increase of 7% over the previous year. We expect the company's coal prices to drop by about 5% throughout the year. Profit forecasts and investment recommendations Considering that the company's coal price falls without the optimism we considered at the beginning of the year, we lowered the company's profit forecast. The company's revenue for 12-14 is estimated to be 3.48 billion yuan, 4.87 billion yuan, and 4.9 billion yuan, respectively, with earnings per share of 0.55 yuan (originally estimated 0.75 yuan), 0.43 yuan (after additional distribution and dilution), and 0.46 yuan (after additional distribution and dilution). According to current stock prices, PE in 12-14 is 11.9 times, 10.6 times, and 10 times, respectively. 1.98 times the latest PB. Based on the current valuation situation, we maintain the company's “buy” rating. The target price is 7.5 yuan. The risk indicates the risk that the company's coal prices will stop falling and rebounding; the risk that the number of power generation hours will drop more than expected.