Profit for the first half of the year is predicted to fall 14% year on year. We expect coal throughput in the second quarter to decline year on year, and we expect profit for the first half of the year to fall by about 14% year on year (13% year on year in the first quarter, minus 55% year on year). Key points of interest Throughput and profit continued to be under pressure in the first half of the year. Since Tianjin Port stopped receiving coal for road transportation from the end of April 2017, throughput in the first and second quarters of this year will still be affected. According to data from the Ministry of Transport, the throughput of Tianjin Port fell 7.4% from January to May. Although the company has taken various measures to deal with it, such as actively expanding railway transportation and collection port capacity (in 2017, the company achieved a year-on-year increase in annual train coal traffic of about 25%), we expect coal throughput in the second quarter to decline year on year. We expect profit for the first half of the year to fall by about 14% year on year (all three months of the first quarter were affected, and two in the second quarter of the second quarter were affected by two quarters) Impact), with a monthly decline of 15% in the second quarter. Valuation and recommendations The current stock price of the company corresponds to the price-earnings ratio of 15.5/13.8 times in 2018 and 19, maintaining a neutral rating. However, considering that the profit was lower than expected, the target price was lowered by 20% to RMB 8.9, corresponding to 16 times the price-earnings ratio in 2019, and there is room for growth of 19.5% compared to the current stock price. Risk throughput continues to decline.