Smartheat (HEAT) research, news, and more from GeoInvesting

Company description

Fri, 19 Sep 2008 04:00:00 GMT

SmartHeat Inc. is a US company with its primary operations in China. SmartHeat is a market leader in China's "green" technology heat energy saving industry. SmartHeat manufactures plate heat exchangers and compact plate heat exchanger units -- the technology that helps to capture and recycle waste heat thus reduces fossil fuel related costs and pollution. SmartHeat's products and technology have broad residential and industrial applications. China's heat transfer market is currently estimated at approximately $2.4 billion with double digit annual growth according to China Heating Association.

Share Structure

Wed, 25 Jan 2012 05:00:00 GMT

Item 5.03 Amendments to Articles of Incorporation of Bylaws; Change in Fiscal Year

On January 19, 2012, the Company filed a Certificate of Amendment to its Articles of Incorporation to effect a one-for-ten reverse split of the Company’s issued and outstanding shares of common stock, par value $.001 per share (the “Common Stock”), effective as of 7:00 a.m. Eastern Standard Time on Monday, February 6, 2012. The Common Stock will commence trading on The NASDAQ Global Select Market on a split-adjusted basis as of the opening of trading on Monday, February 6, 2012. The Common Stock will continue to trade under the ticker symbol “HEAT,” although the letter “D” will be temporarily appended to the ticker symbol for twenty trading days following the reverse split. The Company’s stockholders, at a special meeting of stockholders described below, authorized the Company’s Board of Directors to effect a reverse stock split in a ratio ranging from one-for-three to one-for-ten of all issued and outstanding shares of the Company’s Common Stock.

Following the reverse split, the total number of shares outstanding will be proportionately reduced in accordance with the reverse split. Further, any outstanding options, warrants and rights, if any, as of the effective date that are subject to adjustment will be adjusted accordingly. These adjustments may include adjustments to the number of shares of common stock that may be obtained upon exercise or conversion of these securities, and the applicable exercise or purchase price as well as other adjustments.

There will be no change to the authorized shares or par value of the Common Stock of the Company as a result of the reverse stock split. Any fraction of a share of Common Stock that would otherwise have resulted from the reverse split will be rounded up to the nearest whole number.

Comments & Business Outlook

Tue, 08 Nov 2011 05:00:00 GMT

SMARTHEAT INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	NINE MONTHS ENDED SEPTEMBER 30,						THREE MONTHS ENDED SEPTEMBER 30,
	2011			2010			2011			2010

Net sales	$	31,543,940		$	83,613,250		$	16,573,890		$	51,476,821
Cost of goods sold		21,025,243			54,177,914			11,263,003			33,061,854

Gross profit		10,518,697			29,435,336			5,310,887			18,414,967

Operating expenses
Selling		6,611,522			5,972,651			2,409,435			3,335,303
General and administrative
R&D		598,117			480,572			85,250			259,879
Bad debt		8,913,261			15,744			3,107,589			(38,484	)
G&A expenses		8,550,170			4,126,152			2,244,025			1,840,058

Total operating expenses		24,673,070			10,595,119			7,846,299			5,396,756

Income (loss) from operations		(14,154,373	)		18,840,217			(2,535,412	)		13,018,211

Non-operating income (expenses)
Interest income		166,419			322,462			33,925			117,853
Interest expense		(590,242	)		(41,871	)		(297,007	)		(41,871	)
Financial income (expense)		(54,999	)		(36,430	)		22,285			(17,427	)
Foreign exchange transaction gain (loss)		(439,983	)		24,652			(137,779	)		68,323
Other income, net		548,995			134,446			224,766			52,060

Total non-operating income (expenses), net		(369,810	)		403,259			(153,810	)		178,938

Income (loss) before income tax		(14,524,183	)		19,243,476			(2,689,222	)		13,197,149
Income tax expense (benefit)		(5,159	)		3,059,182			1,322,900			2,092,876

Net income (loss) before noncontrolling interest		(14,519,024	)		16,184,294			(4,012,122	)		11,104,273
Less: Income (loss) attributable to noncontrolling interest		(149,727	)		(16,962	)		(15,003	)		(2,232	)

Net income (loss) to SmartHeat Inc.		(14,369,297	)		16,201,256			(3,997,119	)		11,106,505

Other comprehensive item
Foreign currency translation gain		5,717,019			1,931,721			2,091,719			1,418,870

Comprehensive Income (Loss)	$	(8,652,278	)	$	18,132,977		$	(1,905,400	)	$	12,525,375

Basic weighted average shares outstanding		38,582,342			32,804,292			38,601,939			32,811,125

Diluted weighted average shares outstanding		38,582,342			32,846,171			38,601,939			32,817,520

Basic earnings (loss) per share	$	(0.37	)	$	0.49		$	(0.10	)	$	0.34

Diluted earnings (loss) per share	$	(0.37	)	$	0.49		$	(0.10	)	$	0.34

Mr. James Jun Wang, Chairman and Chief Executive Officer of SmartHeat Inc., made the following comments regarding the performance of SmartHeat during the third quarter of 2011: "We experienced an encouraging increase in sales and deliveries in the third quarter of 2011 compared to the second quarter of 2011, and we are well positioned to take advantage of the results of China’s current anti-inflation policies. The slowdown in the heating-supply and other industrial markets in China continued, caused in part by the Chinese government's ongoing tightening of fiscal policy to fight inflation. We are overcoming the postponement and cancellation of some of our plate heat exchanger (PHE) orders in the first half of 2011, however, and maintaining our gross margin by strengthening our sales efforts through the maturation of our sales force, increasing sales channels, improving cost controls, increasing prices and continuing to improve the efficiency of our manufacturing operations, which may include staff reductions in certain plants.

"Despite the challenging sales environment, we are encouraged by the progress of synergization and integration after the acquisition of Gustrower Warmepumpen GmbH and Shenyang Bingchuan Refrigerating Machine Limited in the first quarter of 2011. We anticipate increased sales in the heat pump sector from both of these companies. Despite the temporary fiscal tightening impacting our customers in China, we expect that the Chinese government will continue to require implementation of energy savings policies to reduce emissions, which we believe will continue to increase the demand for our energy-saving products in all industrial sectors. We are optimistic about taking advantage of West China's economic development and urbanization trends throughout China as well as positioning ourselves as an international forward-thinking 'green' company."

Revised Full Year 2011 Earnings Guidance

Due to the impact of significant drops of sales, impact of rising prices on business and the integration costs of Gustrower Warmepumpen GmbH and Shenyang Bingchuan Refrigerating Machine Limited Company, two companies acquired by SmartHeat in Q1 2011, the Company is revising its full year 2011

earnings guidance to $18 million to $20 million in net loss
revenue guidance $40 million to $50 million

Investor Alert

Wed, 05 Oct 2011 04:00:00 GMT

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On September 29, 2011, SmartHeat Inc. (the “Company”) received a notice from NASDAQ's Listing Qualifications Department indicating that for the last 30 consecutive business days the bid price for the Company’s common stock had closed below the minimum $1.00 per share required for continued listing on The NASDAQ Global Market under NASDAQ Listing Rule 5450(a)(1). The notification letter states that the Company will have 180 calendar days, or until March 27, 2012, to regain compliance with the minimum bid price requirement. In order to regain compliance, shares of the Company’s common stock must maintain a minimum bid closing price of at least $1.00 per share for a minimum of ten consecutive business days.

If the Company does not regain compliance by March 27, 2012, NASDAQ will provide written notification to the Company that the Company's common stock will be delisted. At that time, the Company may appeal NASDAQ's delisting determination to a NASDAQ Listing Qualifications Panel. Alternatively, the Company may apply to transfer its common stock to The NASDAQ Capital Market if it satisfies all of the requirements, other than the minimum bid price requirement, for initial listing on The NASDAQ Capital Market set forth in Marketplace Rule 5505. If the Company were to elect to apply for such transfer and if it satisfies the applicable requirements and its application is approved, the Company would have an additional 180 days to regain compliance with the minimum bid price requirement while listed on The NASDAQ Capital Market.

The Company intends to actively monitor the bid price for its common stock between now and March 27, 2012, and will consider all available options, including a reverse stock split, to resolve the deficiency and regain compliance with the NASDAQ minimum bid price requirement.

Comments & Business Outlook

Tue, 09 Aug 2011 04:00:00 GMT

Second Quarter 2011 Results

Mr. James Jun Wang, Chairman and Chief Executive Officer of SmartHeat Inc., made the following comments regarding the performance of SmartHeat during the second quarter of 2011: "Even though the first quarter's trend of decreasing sales and deliveries continued in the second quarter of 2011, we are well positioned to take advantage of the results of China's current anti-inflation policies. Our business trend is due to the continued slowdown in the heating-supply and other industrial markets caused in part by the Chinese government's ongoing tightening of fiscal policy to fight inflation. We are overcoming the postponement and cancellation of some of our plate heat exchanger (PHE) orders in the first half of 2011 and maintaining our gross margin by strengthening our sales efforts through the maturation of our sales force, increasing sales channels, improving cost controls, increasing prices and continuing to improve the efficiency of our manufacturing operations, which may include staff reductions in certain plants.

"Despite the drop in sales, we are encouraged by the continued strength of sales of heat meters in the first half of this year. We have been investing and working on integration after the acquisition of Gustrower Warmepumpen GmbH and Shenyang Bingchuan Refrigerating Machine Limited, and we continue our efforts to expand into international markets where we believe our products have significant advantages over our competitors. We anticipate increased sales in the heat pump sector from both of these companies. Despite the temporary fiscal tightening impacting our customers in China, we expect that the Chinese government will continue to require implementation of energy savings policies to reduce emissions, which we believe will continue to increase the demand for our energy-saving products in all industrial sectors. We are optimistic about taking advantage of West China's economic development and urbanization trends throughout China as well as positioning ourselves as an international forward-thinking 'green' company."

Financial Summary

In the second quarter of 2011, total sales decreased to $7.08 million compared to $7.89 million in Q1 2011. In the first six months of 2011, total sales decreased to $14.97 million compared to $32.14 million in the same period of 2010. The decrease in sales was primarily due to tightened fiscal policy in China, which has contributed to a general slowdown in many sectors of the Chinese economy and caused a decrease in sales of our PHE Units and PHEs. Some of our customers faced an extended bank loan application process and other state-owned enterprises encountered difficulties in obtaining grants from the government, both of which typically are used to finance the purchase of our products, which resulted in the unexpected cancelation of orders and delays in the performance of PHE Unit and PHE contracts. Although these events caused a decrease in sales, we expect that a portion of the canceled PHE Unit and PHE orders will be reinstated and contracts that have been partially delayed will be performed within this fiscal year or 2012, reducing the impact of the drop in sales over the long term. We are taking steps to increase the sales of our PHE Units and PHEs by continuing our expansion into regional areas of China and are encouraged by our progress in establishing international sales channels in Europe, North and South America, which we expect will meaningfully contribute to revenue in 2012.

Operating loss totaled $7.10 million in Q2 2011, compared with operating loss of $7.41 million in Q1 2011. Our net loss for Q2 2011 was $6.42 million compared to net loss of $6.41 million for Q1 2011. Net loss totaled $10.37 million in the first six months of 2011, compared to net income of $5.07 million for the same period of 2010, a decrease of $15.44 million. This decrease in net income was attributable to the temporary decrease of net sales and increased bad debt allowance reserve.

Last week, China's central bank vowed to "keep reasonable financing scale by utilizing comprehensive combination of fiscal policies." This was acknowledged as the possible inflection point of stringent fiscal policy. The Company believes that the current slowdown in heat-supply and other industrial markets caused by the Chinese government's tightened fiscal policy will be temporary and that the previous expansion and training of the Company's marketing team and other employees should result in improved sales and efficiency of its operations. Nevertheless, the Company expects to institute a rigorous program of cost cutting to continue tight control of its budget and maintain cost-effectiveness and implement additional cost control measures, including a review of the staffing levels in response to the decrease in sales.

Comments & Business Outlook

Tue, 10 May 2011 04:00:00 GMT

In the first quarter of 2011, total sales decreased 16% to $7.89 million compared to $9.39 million in Q1 2010 resulting from a decrease in sales of our PHE Units to our customers that are state-owned enterprises.
Operating loss totaled $4.51 million, compared with operating income of $1.82 million in Q1 2010.
Net loss in the quarter totaled $3.95 million, down from $1.7 million net income ($0.05 per diluted share) in Q1 2010.

Geoteam® Note: 2011 First quarter analyst EPS estimates were $0.05.

The decrease in sales was primarily due to tightened fiscal policy in China, which impacted state-owned enterprises that are encountering difficulties in obtaining grants from the government and facing an extended bank loan application process. The new fiscal policy resulted in unexpected cancelations of orders and unscheduled delays in the performance of PHE Unit contracts, which decreased revenue from that product line. The company expects that a significant portion of the canceled PHE Unit orders will be reinstated and some of the contracts that have been partially delayed will be performed within this fiscal year or in 2012.

As a result of these delays, we reserved $2.07 million for a bad debt allowance in the first quarter even though we expect a substantial portion of the bad debt to be paid.

Mr. James Jun Wang, Chairman and Chief Executive Officer of SmartHeat Inc., made the following comments regarding the performance of SmartHeat during the first quarter of 2011: “This is the first fiscal quarter in the history of SmartHeat in which we encountered a simultaneous decrease in sales and a net loss. Unfortunately, we are not alone in China with respect to these challenges. Some of our plate heat exchanger (PHE) unit customers postponed or canceled their orders due to the Chinese government’s tightened fiscal policy used to fight inflation. We also faced increased prices of some key materials we use in our manufacturing operations. We expect to overcome these difficulties and maintain our gross margin by strengthening our sales efforts through the maturation of our sales force, increasing sales channels, improving cost controls, increasing prices and continuing to improve the efficiency of our manufacturing operations, which may include staff reductions in certain plants in response to the decrease in revenue from PHE Units.”

“Despite a drop in PHE Unit sales, we are encouraged by the continued strength in sales of heat exchangers and heat meters in this quarter. We also anticipate increased sales in the heat pump sector from our acquisition of Gustrower Warmepumpen GmbH and Shenyang Bingchuan Refrigerating Machine Limited. In addition, SmartHeat has been selected as the sole supplier of heat exchangers and complete packaged units for a series of projects in North and South America. This program fits with SmartHeat’s energy efficiency mandate because our technology converts waste heat from diesel and gas engine power plants into electricity using no additional fuel and creating no greenhouse gas emissions. Despite the temporary fiscal tightening impacting our PHE Unit customers, we expect that the Chinese government will continue to require implementation of energy savings policies to reduce emissions, which we believe will continue to increase the demand for our energy-saving products in all industrial sectors. We are optimistic about taking advantage of West China’s economic development and urbanization trends throughout China as well as positioning ourselves as a forward-thinking “green” company.”

Revised Full Year 2011 Earnings Guidance

Due to the

impact of China’s tightened fiscal policy on the company’s PHE Unit customers
impact of rising prices on business and the integration costs of Gustrower Warmepumpen GmbH and Shenyang Bingchuan Refrigerating Machine Limited Company, two companies acquired by SmartHeat in Q1 2011,

The company is revising its full year 2011 earnings guidance to

$9.5 million to $14 million in net income and $63 million to $93 million in revenues
reflecting $0.25 - $0.36 earnings per share.

Comments & Business Outlook

Tue, 15 Mar 2011 04:00:00 GMT

Fourth Quarter Highlights and Guidance:

In the fourth quarter of 2010, total sales increased 60.61% to $41.79 million compared to $26.02 million in 4Q09
Net income in the fourth quarter totaled $6.50 million, up 122.26% from $2.92 million in 4Q09
SmartHeat is announcing full year 2011 guidance of $22 - $28 million in net income on $120 - $150 million in revenues, reflecting $0.60 - $0.80 EPS.

Mr. James Jun Wang, Chairman and Chief Executive Officer of Smart Heat Inc., commented: "We maintained the momentum from the first nine months of 2010 and delivered another set of strong results. We thank our hard working employees who are dedicated to executing our operational strategy. We are quite pleased to see the significant payback we expected to receive from investments made to expand our sales and distribution channels."

Comments & Business Outlook

Tue, 18 Jan 2011 05:00:00 GMT

SHENYANG, China Jan. 18, 2011 /PRNewswire-Asia/ -- SmartHeat, Inc. a leading Chinese manufacturer, integrator and designer of PHEs (plate heat exchanger) and PHE Units, announced today that it has signed sales agreements to supply its PHEs to the Tian Wan nuclear power station in Jiangsu, which is owned by the China National Nuclear Corporation, China's biggest state-owned nuclear power manufacturer. SmartHeat won two projects through a public bidding process and expects to deliver the PHEs in October 2012 and June 2013.

James Wang, SmartHeat's Chairman & CEO, commented, "While Tian Wan's initial order of PHEs totaled only $650,000, it represents a major milestone for SmartHeat as we have now entered into the nuclear power sector through the largest state-owned, government-managed, nuclear power producer in China. We believe this order will create additional opportunities to supply heat exchangers and related products to nuclear power stations in China."

Comments & Business Outlook

Wed, 10 Nov 2010 05:00:00 GMT

Third quarter of 2010

Total sales increased 36.05% to $51.48 million compared to $37.84 million in 3Q09.
Net income in the quarter totaled $11.11 million ($0.34 per diluted share), up 25.07% from $8.88 million ($0.36 per diluted share) in 3Q09. The higher net income was driven primarily by increased sales from PHEs and PHE units.

Earnings per share decreased by $0.02 per share because of our secondary offering in the third quarter of 2009.

Updates Full Year 2010 Earnings Guidance and Target 2011 Earnings Guidance

SmartHeat is updating its full year 2010 guidance from

$106 - $116 millionin revenues to $110 - $120 millionin revenues
$20 - $22 millionin net income to $22 - $24 million in net income.

In addition, SmartHeat is announcing full year 2011 guidance of $25 - $30 million in net income on $135 - $160 million in revenues.

Outlook

Mr. James Jun Wang, Chairman and Chief Executive Officer of Smart Heat Inc., commented: "We maintained the momentum from the first half of 2010 and delivered another set of strong results. We thank our hard working employees who are dedicated to executing our operational strategy. We are quite pleased to see the significant business expansion to West China and are very satisfied with the growth across all our existing business lines and the benefits we expect to receive from investments made to expand our sales and distribution channels."

"Government requirements to implement energy savings and emission reduction have increased the demand for our energy-saving products in all industrial sectors. Taking advantage of economic development in West China and urbanization trends throughout China will be continue to be part of our long-term strategy. Based on the successful expansion to West China's market and some second and third tier cities, SmartHeat is well positioned to reap significant benefits," concluded Mr. Wang.

Deal Flow

Tue, 19 Oct 2010 04:00:00 GMT

Smartheat files Shelf:

We may from time to time, in one or more offerings at prices and on terms that we will determine at the time of each offering, sell common stock, warrants, debt securities, rights or a combination of these securities, or units, for an aggregate initial offering price of up to $100,000,000. This prospectus describes the general manner in which our securities may be offered using this prospectus. Each time we offer and sell securities, we will provide you with a prospectus supplement that will contain specific information about the terms of that offering. Any prospectus supplement may also add, update, or change information contained in this prospectus. You should carefully read this prospectus and the applicable prospectus supplement as well as the documents incorporated or deemed to be incorporated by reference in this prospectus before you purchase any of the securities offered hereby.

"Except as otherwise provided in the applicable prospectus supplement, we intend to use the net proceeds from the sale of the securities covered by this prospectus for capital expenditures and acquisitions of new technologies or businesses. While we have not identified any specific acquisition candidates at this time, we believe that we will require additional financing to complete acquisitions that fit our strategic objectives. The precise amount, use and timing of the application of such proceeds will depend upon our funding requirements and the availability and cost of other capital. Additional information on the use of net proceeds from an offering of securities covered by this prospectus may be set forth in the prospectus supplement relating to the specific offering."

Comments & Business Outlook

Thu, 12 Aug 2010 04:00:00 GMT

2010 second quarter Financial Highlights:

Revenues of $22.77 million, up 82% from 2Q09
Operating income of $4.00 million, up 31% from 2Q09
Net income of $3.39 million up 30% from 2Q09
EPS: $0.10 vs $0.11
Better than Expected Sales from Heat Exchangers

Mr. James Jun Wang, Chairman and Chief Executive Officer of Smart Heat Inc., commented that: "We maintained the momentum from the first quarter of 2010 and delivered another set of strong results. We thank our hard working employees, who are dedicated to executing our operational strategy. We are quite pleased to see the significant business expansion to West China, are very satisfied with the growth across all our existing business lines and the benefits we expect to receive in restructuring our sales and distribution channels."

"Government requirements to implement energy savings and emission reduction have increased the demand of our energy-saving products in all industrial sectors. Taking advantage of economic development in West China and urbanization trends throughout China will continue to be part of our long-term strategy. Based on the successful expansion to West China's market and some second and third tier cities, SmartHeat is well positioned to reap significant benefits," concluded Mr. Wang.

Outlook

Research

Thu, 22 Apr 2010 04:00:00 GMT

Smartheat removed from the GeoBargain on the Radar list. 2010 EPS growth is forecasted to come in at 11.1% before picking up again in 2011 to 43.9%. We will revisit as 2011 nears.

Added to GeoBargain on the Radar List on June 20, 2009 @ $7.20

Current Price: $9.43

Reached a high of $18.60 on January 11, 2010.

Comments & Business Outlook

Tue, 11 Aug 2009 04:00:00 GMT

Mr. Wang commented: "Since the beginning of the 2nd half, we have experienced greater customer order flow and willingness among our existing and new customers to increase demand for our energy savings equipment. Our recently completed asset acquisition of one of China's largest PHE manufacturers has not only expanded our production capabilities but also extended our product offerings to new customer segments. We believe SmartHeat's rapid earnings growth momentum will continue well into 2010 as we anticipate broader global economic recovery next year. We are optimistic that SmartHeat is on track to achieve solid 3rd quarter earnings growth and another year of record success in 2009 for our growing list of individual and institutional shareholders."

FULL YEAR 2009 Guidance Ending December ^a

	Full Year 2009 Guidance	Full Year 2008 Reported	Period Change
GAAP Revenue	$80.0 million	$32.7 million	144.6%
GAAP Net Income	$15.5 million	$6.3 million	146.0%
GAAP EPS ^b	$0.64	$0.29	120.7%
Tax Adjusted EPS	$0.51	$0.23	121.7%
Fully Diluted Shares	24,179,900^c	22,176,432	9.0%

Source: See Release (PR Newswire August 11, 2009)

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

^bSmartheat did not provide EPS guidance. The GeoTeam® calculated an implied EPS figure using the current outstanding share count of 24,179,900.

^c 24,179,900 shares as of Aug 10, 2009 (Per second quarter 10Q)

Comments & Business Outlook

Sat, 20 Jun 2009 04:00:00 GMT

James Jun Wang, CEO of SmartHeat, commented: 'Our first quarter financial results reflected management expectations and the execution of our growth plan as we laid out in early 2009. As a market leader in the rapidly expanding clean technology energy savings industry in China, SmartHeat intends to further expand our business through both organic growth and strategic acquisitions. SmartHeat is exploring synergistic benefits with several acquisition targets in our industry which may be immediately accretive to our 2009 earnings if we acquire them. Operating in a favorable market environment, SmartHeat is on track to achieve another year of record success in 2009.' We anticipates earnings growth momentum to continue for the rest of 2009.

Source: See Release (May 11, 2009)

Comments & Business Outlook

Wed, 18 Mar 2009 04:00:00 GMT

James Jun Wang, CEO of SmartHeat, commented: 'Our audited 2008 financial results exceeded management's financial performance targets as we laid out in early 2008. SmartHeat expects to experience significant product sales in 2009 as China has made reduction in air pollution a national priority through stronger environmental protection measures, greater funding efforts and broad mandates for clean technology energy savings equipment use. Based on significantly increased product orders received in the first two months in 2009 compared to the same period in 2008, SmartHeat anticipates strong product sales and earnings growth in 2009 from all sectors of our customer base: government, industrial, commercial and consumers. We look forward to another year of record earnings in 2009.'

Source: PR Newswire (March 18, 2009)

Research

Fri, 06 Feb 2009 05:00:00 GMT

SmartHeat Inc., a market leader in China's clean technology energy savings industry, today announced the signing of a $1.2 million equipment supply contract with Uda Heat Power Company located in Inner Mongolia. This region is one of China's major coal production areas and is heavily polluted due to coal burning.

Source: PR Newswire (February 2, 2009)