Citigroup maintained its 03369.HK buy rating and lowered its target price to 3.97 yuan from 6.44 yuan.

According to the Huaqi report, Qingang's net profit last year was 33% and 22% lower than the bank and the market expected, and the bank correspondingly cut its 2016-2017 net profit forecast by 37.6% and 36.3% to reflect the removal of government subsidies and lower operating interest rates. this forecast price-to-earnings ratio of 13 times this year.

The bank pointed out that Qingang's revenue fell 4.6 per cent last year, mainly due to a 3.1 per cent drop in throughput. The provision of RMB 164 million in welfare expenditure during the period and the receipt of RMB 350 million in advance compensation for employee resettlement related to the outage of coal handling business in Xigang District in 2014 are both reasons for the retrogression of the company's profits.

The bank believes that the company's core coal throughput in 2015 was disappointing, mainly because the economic slowdown affected demand, but iron ore grew by 17.5 per cent, mainly due to low basis points and low ore prices.