Excerpts:

In 1H2008, operating income of the company increased by 24.29% yoy; net profit to the parent company decreased 46.86% yoy; diluted EPS: Rmb0.20. During the reporting period, the company’s generating capacity rose 11.3% yoy and the output of oil and gas remained stable and rapid growth. In 1H2008, prices of the company’s standard coal soared nearly 40% yoy and gross margin of power business dropped 22.57% yoy, which led to sharp shrink of net profit to the parent company on year-on-year basis. 2008-2010 EPS for the company is estimated to be Rmb0.53, Rmb0.66 and Rmb0.72 respectively with the corresponding 14xPER, 12xPER and 11xPER. "Overweight" rating is deserved. Risks: increasingly climbing coal prices and transportation costs.