Operating data for the third quarter, volume and price were lower than expected: China's Qinfa released operating data for the third quarter today: the trade volume for the first three quarters was 12.42 million tons, an increase of 19.6% over the previous year. The third quarter trade volume was 4.1 million tons, up 5% year on year and down 11% month on month, in line with expectations. However, due to production restrictions, the company's own commercial coal mine produced only 2.57 million tons of commercial coal in the first three quarters, and 370,000 tons in the third quarter, a sharp drop of 67% over the previous quarter. The average selling price was 502 yuan/ton, a year-on-year decrease of 20.7%.

The profit forecast was lowered. Losses in 2012 were inevitable, and the “neutral” rating was maintained: since the company's volume and price were lower than expected, we continued to lower the company's business forecast, and Huameiao's production was lowered from 6.3 million tons to 5.8 million tons;

The average selling price was lowered from 586 yuan/ton to 524 yuan/ton. The 2012/2013 profit forecast was lowered from 0.11/0.14 yuan to -0.13/0.10 yuan, and it is inevitable that losses will be realized in 2012. Considering that the company's PB valuation is only 0.8 times, we believe that under the assumption that there is systemic risk in the general market, the risk of the company's decline is limited, and it maintains a “neutral” rating.