As we expected, the company's operating data for the fourth quarter of 2012 are very poor. According to the announcement, in the fourth quarter of 2012, the company completed 477,000 tons of raw coal, down 65 percent from the same period last year, 2.01 million tons of coking coal, down 69 percent from the same period last year, and 21,000 tons of coke, down 59 percent from the same period last year. In terms of product sales, the company's sales of fine coking coal was 980 yuan / yuan in the fourth quarter, down 25% from the same period last year, and coke sales was 1376 yuan / yuan, down 13% from the same period last year.

As we expected, the fourth quarter is more unfavorable, the fourth quarter is more unfavorable, mainly from three reasons, mainly from three aspects. First, the price of refined coking coal fell further in the fourth quarter, with an environmental decline of 6.8%. The second is the loss of capacity. The August 29 gas accident that occurred in the west of Panzhihua City at the end of August led to the continuous shutdown of all coal mines in the whole city of Panzhihua. Due to the shutdown, the company lost 150,000 kilowatt hours in the third quarter and nearly 500,000 tons in the fourth quarter. In early December, a coal and gas outburst accident occurred in the No. 1 coal mine in Fuyuan Jianyang, Qujing City, South China. As a result, all nine of the company's health plants located in Fuyuan have been shut down. as a result, the environmental ratio of raw coal from Yunnan has been reduced by 160,000. Third, due to the impact of the shutdown, the unit cost of the company's raw coal will rise, which will significantly lower the company's annual gross profit margin.

Further lower the company's profit forecast from 2012 to 2014. Combined with the fourth-quarter data and our judgment on the coking coal industry and the company's fourth-quarter earnings, we further reduced the company's profit forecast for 2012 / 2013 / 2014 to 0.09 / 0.13 / 0.17 / share to 0.01 / 0.10 / 0.13 / share.

Maintain the company's "neutral" investment level. The slowdown in macro economic growth has weakened downstream demand, which has led to a sharp drop in the company's sales of goods. On the other hand, the poor safety profile of small and medium-sized coal mines in the southwest region has created a very large and irresistible negative impact on the continued stability of the company, and this kind of possible impact has existed for a long time and can be avoided. Based on the low growth forecast for the next three years, we continue to maintain the company's "neutral" investment level and maintain the target of HK$1.48, which is 12.5 times the 2013 dynamic PE, with a potential increase of-38.1%.