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Analysis of Changes in Funds’ Heavy Holdings in Coal Stocks in Q4 2007 – Tianxiang Investment Consulting – Su Xiaoguang, Wei Wei. Event description: All funds have released their reports for Q4 2007; based on these reports, we compared the changes in the holdings of coal industry stocks among the funds’ key holdings in Q3 2007 and Q4 2007. Analysis: 1. Compared with the data at the end of the third quarter in 2007, funds continued to increase their holdings in coal industry stocks during the fourth quarter. Excluding Guotou Xinji, which was listed in the fourth quarter, the number of coal stocks held in large quantities by funds at the end of the fourth quarter increased from 589.3307 million shares in the third quarter to 652.7111 million shares, a rise of 10.75% on a quarterly basis. The shares held in large quantities by funds accounted for 12.92% of the total outstanding shares, up from 11.04% in the third quarter; they also represented 2.38% of the total share capital, higher than 1.99% in the third quarter. Including SDIC Xinji, the number of coal stocks held in large quantities by the fund in the fourth quarter rose to 657.1251 million shares, accounting for 12.32% of the tradable shares and 2.24% of the total share capital. 2. The number of coal stocks held in large quantities by the fund decreased from 17 at the end of the third quarter to 14. According to statistics, the 14 coal stocks that are heavily held by funds are: Meijin Energy, Shenhua Shares, Jinniu Energy, Gasification, Xishan Coal and Electricity, Liankuang Coal Industry, Lanhua Science and Innovation, Guoyang New Energy, Shanghai Energy, Kailuan Shares, China Shenhua, Pingmei Tianan, Lu’an Environmental Energy, and SDIC Xinji. Among them, CIC New Energy is a stock that was added to the fund’s portfolio in the fourth quarter. 3. The heavyweight stocks held by funds in the fourth quarter were adjusted. The number of funds holding shares in China Shenhua, Coal Gasification, Pingmei Tianan, and Jinniu Energy, as well as their shareholding ratios (the proportion of shares held relative to the total share capital), have increased. The number of fund managers that held significant positions in China Shenhua increased from 16 at the end of Q3 to 37 at the end of Q4, while their shareholding ratio rose from 0.09% to 0.55% ； The number of fund managers with heavy holdings in gasification increased from 1 at the end of Q3 to 3 at the end of Q4, while their shareholding ratio rose from 4.32% to 8.95% ； The number of funds that held large positions in Pingmei Tianan increased from 9 at the end of Q3 to 11 at the end of Q4, while their shareholding ratio rose from 6.50% to 8.06% ； The number of funds that held significant positions in Jinniu Energy increased from 7 at the end of Q3 to 9 at the end of Q4, while their shareholding ratio rose from 4.80% to 9.53%. Other coal stocks that were heavily held by the funds saw a decrease in the number of holders or a decline in their shareholding ratios, while Zhengzhou Coal and Electricity, Hengyuan Coal and Electricity, Datong Coal Industry, and Antai Group were removed from the list of stocks held in large quantities by these funds in the fourth quarter. 4. According to our analysis, among the stocks held in large quantities by funds in the fourth quarter, China Shenhua is expected to achieve a full public listing in the long term, thanks to its integrated coal, electricity, transportation, and port industry chain, its leading position in the sector, and the gradual incorporation of the group’s assets; as a result, funds are actively investing in this stock ； Coal gasification is being pursued due to the plan to establish five industrial parks in Taiyuan, Yuci, Donghe, Lishi, and Jingyou within the next 2-3 years, with the aim of creating an integrated industrial structure based on coal coking, coal chemical processing, and urban gas production; this approach has also led to an increase in investment from funds ； Due to the scarcity of its coal type, Pingmei Tianan experiences a relatively rapid increase in prices, and it faces less pressure from policy-related costs; as a result, there are strong expectations regarding an improvement in the company’s performance, which has attracted the attention of funds ； Jinniu Energy has also gained the favor of funds due to its capacity expansion through acquisitions, as well as strong expectations of asset injections. 5. We believe that among the stocks with heavy holdings in the fund, it is advisable to continue focusing on coal companies that are industry leaders, have strong expectations of asset injections, possess significant resource advantages, and have clear plans for capacity expansion: China Shenhua, Jinniu Energy, Pingmei Tianan, Xishan Coal & Electricity, Lu’an Huaneng, Lanhua Kechuang, Meijin Energy, and Kailuan Shares. We continue to maintain a bullish outlook on the coal sector in the medium to long term