Key investment points: Over a period of half a year, all parties involved in the major asset restructuring of Zhangze Electric Power reached an agreement. China Power Investment, the majority shareholder of the company, and Shanxi International Electric Power, the second largest shareholder, transferred their 185 million shares and 114 million shares, respectively, to the Shanxi Provincial State-owned Assets Administration Commission free of charge. The company also issued shares to Tongmei Group to acquire coal power assets such as Tashan Power Generation. After the restructuring is completed, Tongmei Group will hold a total of 47.6% of the shares in listed companies and become the controlling shareholder of Zhangze Electric Power. With the transformation of coal-power joint ventures, fundamentals have been greatly improved. This major asset restructuring is a major step for the company to solve the coal power dilemma and seek development. The company's strategic transformation to coal-power joint ventures will optimize the company's coal power asset structure and effectively enhance the company's comprehensive asset quality and profitability. The share of coal-power joint units will increase to 69%, and gross margin can increase by 17 percentage points to 8%. Looking at a longer time span, the strategic transformation direction proposed by the company to develop coal-power joint ventures will partially solve the coal power dilemma. The high-quality kengkou coal resources owned by coal and the technical and management advantages of Zhangze Electric Power will create a synergistic effect of complementary advantages. Through the continuous acquisition of high-quality coal power resources, the company's asset quality and profit level will continue to improve. The performance of existing power plants is highly flexible, and there is plenty of room for potential performance improvement. After Tongmei enters Zhuzhangdian, the operating environment of the company's existing power plants will be improved from two aspects: first, coal for the power plant will be directly supplied from within the group and the proportion of contract coal will be appropriately increased; second, Tongmei Group will use its own resource advantages to transform the rest of the company's power plants into Kengkou power plants integrated with coal and electricity. The company's existing power plants will be expected to continue to improve their performance, while the high performance elasticity created by the low ignition price difference may expand the room for potential performance improvements, and continue to pay attention to progress in obtaining supporting coal sources. The expansion of coal-fired power projects has created room for growth. The development of integrated coal and electricity industry by Tongmei Group has profound strategic significance and practical considerations. After acquiring the power business platform of Zhangze Electric Power, Tongmei Group will take advantage of the company's technical and management advantages in the power industry to accelerate the pace of expansion into the power industry. As the only platform for the development of the Group's integrated coal and electricity projects, the company will fully benefit from Tongmei Group's expansion in the electricity market. After the asset restructuring, the company will obtain about 6.4 million kilowatts of reserve projects including construction, pending approval, and obtained “road blocks”, etc., which is nearly double the installed capacity of the company after the restructuring. With the support of the same coal capital and coal resources, the company's future growth is quite clear. Maintain the “Overweight” rating. It is estimated that the company's EPS from 2011 to 2013 will be -0.56 yuan, 0.25 yuan, and 0.25 yuan respectively. Based on the closing price of 4.07 yuan on December 9, the company's dynamic PE from 2012 to 2013 will be 16 times and 16 times, respectively. After the asset restructuring was completed, the company's net market ratio fell 1.31 times. Compared with similar thermal power companies, the company's valuation is lower, and future coal-power joint ventures have more room for development, strong growth expectations, and maintain an “increase in holdings” rating. Risk warning: Asset restructuring approval progress has fallen short of expectations; there is uncertainty about the timing of obtaining supporting coal sources for power plants and the progress of coal-power joint venture projects; coal prices remain high, and telephone factory profits are declining.