The company's performance increased significantly in the first quarter. In the first quarter of 2011, the company's operating income was 1.499 billion yuan, an increase of 60.03% over the same period last year. The net profit belonging to shareholders of listed companies was 5.5323 million yuan, an increase of 113.28% over the same period last year, and earnings per share was 0.0055 yuan per share. The sharp increase in performance was mainly due to the increase in sales and sales prices of coke and pig iron, the leading products of the company. The average sales price of coke in the first quarter is about 1750 yuan / ton (the average price for the whole 10 years is about 1664 yuan / ton), and the average sales price of pig iron is about 3100 yuan / ton (the average price for the whole 10 years is about 2767 yuan / ton).

The operating cost in the first quarter was 1.353 billion yuan, up 55.21% from the same period last year, mainly due to the increase in sales and raw material prices of the leading products coke and pig iron. L because the increase in operating income exceeded the increase in operating costs by 4.82 percentage points, the company's comprehensive gross profit margin increased from 6.95% in the first quarter of 10 years to 9.75% in the first quarter of 11. The cause of the safety accident is still under further investigation. On March 29th, a carbon monoxide poisoning accident occurred during the construction of the energy saving and consumption reduction project carried out by Beijing Falmet Technology Co., Ltd., the project contractor, during the overhaul of the boiler in 25MW Power Plant of our company, and the cause of the accident is under further investigation. L company's PB in the first quarter is 2.76 times, which is still at a low level in the industry.

We recommended the company for four main reasons: (1) positive upward extension of the coking coal industry; (2) the coke industry is expected to gradually come out of the trough; (3) the upcoming launch of coke futures is both a short-term catalyst and a long-term positive; (4) the valuation of the company has fully reflected a variety of negative factors. At present, the launch of coke futures has an obvious catalytic effect on stock prices in the short term, but the core reason why we recommend the company-that is, Shanxi Province will vigorously integrate the coke industry this year and other factors will gradually push the coke industry out of the trough-has not changed. We expect that the official draft of the guidance on merger and reorganization of Shanxi Coking Industry may be published in about a month. Subsequently, the curtain of coke integration in Shanxi Province this year will begin, and the "guidance" will be the next major catalyst for the stock price of the coke industry, and its impact will be more substantial and lasting than the launch of coke futures. We maintain the company's "recommended" rating with a target price of 9-10 yuan.