CICC published a research report stating that under the judgment that coal prices are stable in the short term and continue to rise in the medium term, coal companies' profits will grow steadily. However, with market expectations peaking in inflation, policy relaxation, and mid-term steel re-inventory, accelerated security housing, maintenance of the Daqin Line, and preparation of coal in winter, valuation pressure on the coal sector will gradually be released, and the recent rebound is expected to continue. The CICC Index's recent stock selection strategy should focus on undervaluation and growth certainty, recommending China Shenhua (01088-HK) (price-earnings ratio of 14.2 times in 2011); Yanzhou Coal (01171-HK) (price-earnings ratio of 12.8 times in 2011) and Hengding Industrial (01393-HK) (price-earnings ratio of 12.9 times in 2011); and gradually focus on long-term investment opportunities for China Coal Energy (01898-HK) (its short-term performance is mediocre but is expected to return to the growth trajectory in 2012. 9x) CICC gave Shenhua a target price of 43.2 yuan (rated “recommended”); Yancoal 35.4 yuan (rated “carefully recommended”); and China Coal Energy 11.5 yuan (“careful recommendation”). CICC gave Hengding Industrial a target price of 8.3 yuan, with a rating of “Recommended”.