Yanzhou Coal Mining Company Limited (Yanzhou) has released a strong production outlook for FY 2010, attributing growth to the acquisition of Felix Resources Ltd (Felix) in December 2009. Moreover, the company expects Felix to contribute almost two-thirds of the company’s production levels in FY 2012. In light of the optimistic guidance from the company, we maintain our HOLD rating for the company, despite current price levels....

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....

We expect global coal prices to be range bound in 2H 09, demonstrating a more sustained period of recovery from 1H 10 onwards. However, we believe the Chinese economic stimulus will drive modest improvement in coal demand in 2H 09 sequentially, and boost the company's sales volume in 2H 09. During 2010, we expect revenues to rebound on the back of a recovery in coal prices and improvement in the company's production capacity through organic growth as well as acquisition…