Yanzhou Coal Mining Company Ltd. (Yanzhou) reported a steep decline in its top-line and bottom-line in 3Q 09, given a significant decline in realized coal prices during the quarter. Going forward, we expect revenues to rebound in 2010 due to recovery in coal prices and improvement in the company's production capacity through inorganic growth. Therefore, at current prices, we believe the stock is fairly valued and reiterate our HOLD rating for the common stock. The Hong Kong dollar is pegged to the US dollar. Therefore, we assume no currency impact on the ADR over our investment horizon. We maintain our HOLD rating in line with our fundamental outlook.

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