From 2006 to 2008, the company faced operating status of “no profit increase with turnover ascension”.
Service areas of the company are mainly in Shandong, Anhui, Sichuan and Ningxia, etc. We predict that utilization rate of units will decrease only by 4%, better than the national average level.
We divide the coal into three kinds: important closed contract coal (price fixed for the whole year), important opened contract coal (priced at early year, price changes with the market) and complete market coal.
Operating environment of thermal power industry is substantially improved.
We predict 2009-2010E EPS at Rmb0.29 and Rmb0.35 and expect 2009 profit to be matched with income and unit installation; thus, “Cautious” rating is maintained for the counter.