China Qinfa Group Limited provided earnings guidance for the first six months ended June 30, 2012. For the period, consolidated net profit is expected to be significantly less than the amount of the net profit of the Group for the six months ended June 30, 2011. The decrease in the amount of the net profit was principally due to the provision on the then acquisition price of the mining rights required to be paid to the government in China, the provision on the inventory, a decrease in the price of and the demand for thermal coal in China and an increase in the Group's finance costs due to the acquisition loan of Huameiao Energy in 2011.