Highlights of the report describe the company's 2015 annual report today, achieving EPS of -0.54 yuan, which is in line with expectations. Incident review The company's coal production and sales declined year on year. Overall industry demand was weak in 2015. The company's annual coal production was 10.42 million tons, down 4.84% year on year; coal sales were 10.14 million tons, down 3.89% year on year. Among them, in the fourth quarter, the company produced 2.7663 million tons of coal and sold 2.6021 million tons of coal. In 2016, the company plans to produce 1.05 million tons of raw coal, a year-on-year decrease of 3.55% compared to this year's actual production. The gross margin of the company's coal business declined. The company's revenue per ton of coal in 2015 was 246.86 yuan, a year-on-year decrease of 30.07%; the cost of a ton of coal was 226.56 yuan, a year-on-year decrease of 11.53%. Due to the weak coal market, the gross profit margin of the coal business was 8.22%. The year-on-year decline was 19.24 percent. Among them, the company's revenue per ton of coal in the fourth quarter was 189.78 yuan, down 28.80% from the previous three quarters; however, the cost of a ton of coal was 106.78 yuan, down 60.14% from the previous three quarters. The company successfully controlled costs in the fourth quarter, and gross profit per ton of coal increased by 84.35 yuan to 83.00 yuan over the previous three quarters. The company generated 337 million kilowatt-hours in 2015, a year-on-year decrease of 10.61%. The planned power generation capacity for 2016 is 300 million kilowatt-hours, down 10.98% from the actual year in 2015. Expenses were better controlled during the period, and management costs were greatly reduced. Under the weak market, the company increased its cost management. The total cost during 2015 was 831 million yuan, a year-on-year decrease of 20.19%. Among them, sales expenses, management expenses, and financial expenses decreased by 16.90%, 22.77%, and 15.26%, respectively. The company cut costs in the fourth quarter, and the results decreased month-on-month. The company's gross profit increased by 208 million yuan month-on-month to 160 million yuan in the fourth quarter, mainly due to effective cost reduction. In the fourth quarter, it achieved net profit of 117 million yuan and a loss of 138 million yuan month-on-month. Follow the progress of local supply-side reforms and give them an “increase in wealth” rating. The company's endogenous growth potential is relatively limited, and it is expected to benefit from supply-side reforms in Henan Province and keep an eye on subsequent progress. We predict that the company's EPS for 16-18 will be -0.37, -0.32, and -0.29 yuan respectively, giving it an “gain” rating. Risk warning: The macroeconomy has declined sharply, and supply-side reforms have fallen short of expectations