UBS issued a report that downgraded 03369.HK 's earnings forecast for 2016-18 by 48% to 62%, reflecting a weak outlook for the coal market and a further decline in coal freight rates, with its target price lowered from Rmb5.40 to Rmb2.45 and its rating downgraded from "buy" to "sell".

The bank pointed out that it is more worried about the reduction in coal prices this year than the decline in freight volume, and the average revenue per ton of coal handling business is expected to fall by 5% and 8% respectively this year and next year, as competition from other dedicated coal ports intensifies. Assume that every RMB 1 deduction from freight will drag down earnings per share of RMB0.03. UBS expects the coal throughput of Qinhuangdao port to fall by 20% year-on-year this year, meaning that it will fall by 13% in the second half of the year.

UBS mentioned that despite the weak outlook for coal demand, the new Caofeidian Coal Terminal in Qinhuangdao will begin operation at the end of this year, thus increasing the burden of depreciation and amortization costs and interest charges. According to the company earlier, the group plans to build a new dry bulk terminal around the Bohai Sea and carry out mergers and acquisitions outside China, and the bank estimates that the group's annual capital expenditure will be as high as 1.5 billion yuan in 2016-18.