The company announced the acquisition of some shareholders and equity of the subsidiary Wujiu Coal Group The company announced that the wholly-owned subsidiary, Shanghai Xindazhou Investment Company, acquired the minority shareholders' interests of Guangzhou Longwang Industrial and other 599 Coal Group and the interests of some related parties for a total of 33.33%, with a total transfer price of 500 million yuan. After the acquisition, the company directly held 52.55% of Wujiu Coal and 33.33% indirectly, for a total of 85.88%. After the acquisition was completed, the only shareholders of Wujiu Coal Group were Xindazhou A (85.88%) and Shanghai Landao Investment (14.12%). The acquisition of PB was 5.63 (net book assets in 2010), and if the assessed net assets of 569 million yuan were calculated, the acquisition of PB was 2.64, and PE was 12 times (net profit in 2010). Among them, the mining rights for coal mines produced by the Wujiu Coal Group are 3.24 yuan/ton, and the prospecting rights of the Xinshengli Mine and Baiyin Chagan are assessed at 0.44 yuan/ton (the Xinshengli Mine is 0.51 yuan/ton, Baiyin Chagan is 0.42 yuan/ton). The equity acquisition increased EPS by 0.057 yuan based on the 2010 performance calculation, with an increase ratio of 30.79%. In 2010, the Wujiu Coal Group controlled by the company achieved revenue of 572 million yuan and net profit of 125 million yuan. According to the 33.33% equity conversion of this cash acquisition, the company's 2010 performance can be increased by 0.057 yuan, accounting for 30.79% of the company's 2010 performance. Shares were straightened out and increased not only in terms of performance, but also at a faster pace of development. In addition to the company, the shareholders of the 599 Coal Group before the acquisition had other small shareholders brought in before, mainly including the company's motorcycle business suppliers and some executives (such as current chairman Zhao Xuhong, director Huang Shici's wife, etc.) and other independent small shareholders. Although Xindazhou is the largest shareholder, its shareholding ratio is relatively low, which is not conducive to the rapid development of 599. Wujiu Coal Group entered a rapid development track in 2013 and is currently controlled by the five pairs of production mines under the 59 Group, namely Xinxin Mine Zone 1 and 2 (300,000 tons); the Wujiu Group 2 and 3 mines (300,000 tons); and Yaxing Coal (900,000 tons), a wholly-owned subsidiary, Yaxing Coal (900,000 tons), with a total production capacity of 2.1 million tons. In 2010, the company achieved production of 2.41 million tons. Those under construction include the Xinshengli Mine (1.2 million tons, prospecting rights, 176 million tons of long-term coal reserves), Baiyin Chagan (1.2 million tons, 10 million tons of mining rights, and 1,2913.1 billion tons of lignite prospecting rights). The new Shengli mine is expected to be put into operation in the second half of 2013, and the Baiyinchagan mine is expected to be put into operation in 2015. The company expects to complete 176 million tons of exploration and transfer work at the Xinshengli Mine by the end of this year, and the Baiyinchagan coal mine will still have to wait for the unified plan of the local development and reform commission before submitting it to the state department for approval. Steady development of motorcycle business The company's motorcycle business continues to develop steadily every year. In 2010, it produced 800,000 vehicles, sold 770,000 vehicles, and had a net profit of 126 million yuan, contributing 63 million yuan in investment income, equivalent to 0.09 yuan of EPS, accounting for 50% of the company's overall profit. In the future, the company's motorcycle business will contribute a stable portion of profit to the company every year. The location advantage is obvious, and long-term value investment is obvious. We believe that Yakeshi City, where the company's coal mine is located, has a clear geographical advantage over the coal mines of the open-air Heping Zhuang Coal Industry and the consumption area in Northeast China. Currently, the company's coal price is similar to that of Pingzhuang. The price in 2011 was 274 yuan/ton, and the average price in Pingzhuang for the whole year of 2010 was 278 yuan/ton. The company's motorcycle business is conservatively estimated to have contributed 0.11 yuan in EPS this year. The current motorcycle valuation is: Qianjiang Motor's 2010 PE is 52 times, and Zongshen Power is 25 times. We have given the company's motorcycle business 25PE, the corresponding stock price is 2.7 yuan, and the remaining PVC business and coal business are valued at only 3.78 yuan. In the first half of this year, the company will also start production of 200,000 tons of calcium carbide PVC in the first phase of 80,000 tons. According to our net profit level of 600 yuan per ton, we have fully reached an EPS contribution of 0.07 yuan. We estimate that the company's 2011-2013 EPS were 0.25, 0.38, and 0.46 yuan respectively, maintaining the buying rating, with a target price of 10 yuan.