According to a report published by UBS, Hengding's performance in the first half of the year is expected to retreat 20.8% to 210 million yuan (same below), with a profit of 0.1 yuan per share, cutting the company's target price by 34% to 1.45 yuan, and maintaining a “sell” rating. According to UBS, Hengding's clean coal sales in the first half of the year were 16% lower than production, which meant that there was an inventory backlog of 150,000 tons. It is expected that the company will need a drastic price reduction in the second half of the year to boost clean coal sales. The price reduction is expected to be 9.5%, and next year it will drop another 6.5%. At the same time, demand for clean coal is expected to remain weak in the second half of this year, lowering Hengding's clean coal sales forecast by 4.3% to 1.86 million tons this year. According to UBS, the challenges faced by the company in the second half of the year were how to improve sales and reduce inventory. Affected by price cuts and weak demand, UBS lowered Hengding's profit forecast for today, Ming and 2014 to 578 million, 528 million and 249 million dollars. According to UBS, Hengding was also affected by refinancing 1.7 billion convertible bonds in the second half of the year, believing that under the current high level of financial leverage, the company would not be able to enjoy the benefits of interest rate cuts in the mainland.