[Important Notice](index=3&type=section&id=Item%20I.%20Important%20Notice) This section provides the company's assurance regarding the accuracy and completeness of the quarterly report, along with its audit status [Board of Directors' Statement and Assurance](index=3&type=section&id=1.1-1.3.%20Board%20of%20Directors'%20Statement%20and%20Assurance) The company's Board of Directors, Supervisory Board, and senior management collectively assure the truthfulness, accuracy, and completeness of this quarterly report, assuming legal responsibility - The company's Board of Directors, Supervisory Board, and directors, supervisors, and senior management guarantee the truthfulness, accuracy, and completeness of the quarterly report content, assuming individual and joint legal responsibility[3](index=3&type=chunk) - The company's responsible person Jiao Chengyao, head of accounting work Xiang Jiayu, and head of accounting department Guo Desheng guarantee the truthfulness, accuracy, and completeness of the financial statements in the quarterly report[5](index=5&type=chunk) [Audit Status](index=3&type=section&id=1.4.%20Audit%20Status) The company's financial statements for the first quarter of 2014 are unaudited - The financial statements in the company's first quarterly report are unaudited[6](index=6&type=chunk) [Company's Major Financial Data and Shareholder Changes](index=4&type=section&id=Item%20II.%20Company's%20Major%20Financial%20Data%20and%20Shareholder%20Changes) This section details the company's key financial performance indicators for the first quarter of 2014 and the shareholder structure as of the reporting period end [Major Financial Data](index=4&type=section&id=2.1.%20Major%20Financial%20Data) In Q1 2014, the company faced performance pressure with revenue down 14.71% and net profit attributable to shareholders declining 63.39%, while operating cash outflow improved and total assets slightly increased 2014 Q1 Major Financial Data | Indicator | Current Period (Jan-Mar) | Prior Year Period (Jan-Mar) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 1,697,044,619.90 | 1,989,739,078.91 | -14.71% | | Net Profit Attributable to Shareholders of the Listed Company (CNY) | 140,475,272.16 | 383,656,063.26 | -63.39% | | Basic Earnings Per Share (CNY/share) | 0.09 | 0.24 | -62.5% | | Weighted Average Return on Net Assets (%) | 1.46% | 4.1% | Decreased by 2.64 percentage points | | Net Cash Flow from Operating Activities (CNY) | -66,427,216.50 | -253,634,572.71 | N/A | - Total non-recurring gains and losses for the current period amounted to **CNY 5,803,574.97**, primarily from gains and losses on entrusted investments or asset management[10](index=10&type=chunk) [Shareholding Status](index=5&type=section&id=2.2.%20Total%20Shareholders%2C%20Top%20Ten%20Shareholders%2C%20and%20Top%20Ten%20Shareholders%20with%20Unrestricted%20Shares%20as%20of%20the%20End%20of%20the%20Reporting%20Period) As of the reporting period end, the company had 60,577 shareholders, with the Henan Provincial People's Government State-owned Assets Supervision and Administration Commission as the largest shareholder at 32.14% with no pledged or frozen shares - As of the end of the reporting period, the company had a total of **60,577 shareholders**, including **60,462 A-share shareholders** and **115 H-share shareholders**[12](index=12&type=chunk) Top Three Shareholders' Shareholding Status | Shareholder Name | Shareholder Nature | Shareholding Percentage (%) | Total Shares Held | | :--- | :--- | :--- | :--- | | Henan Provincial People's Government State-owned Assets Supervision and Administration Commission | State-owned | 32.14 | 521,087,800 | | HKSCC NOMINEES LIMITED | Overseas Legal Entity | 14.99 | 242,996,790 | | Hunan Aier Medical Investment Co., Ltd. | Domestic Non-State-owned Legal Entity | 3.16 | 51,304,108 | [Significant Events](index=6&type=section&id=Item%20III.%20Significant%20Events) This section analyzes the significant changes in the company's major financial statement items and financial indicators, along with their underlying reasons [Analysis of Significant Changes in Major Financial Statement Items and Financial Indicators](index=6&type=section&id=3.1.%20Significant%20Changes%20and%20Reasons%20for%20Major%20Financial%20Statement%20Items%20and%20Financial%20Indicators) During the reporting period, significant changes in financial indicators included a 1432.74% decrease in financial expenses due to reduced exchange losses, increased asset impairment losses from higher receivables and policy changes, and substantial cash outflow from investing activities due to bond purchases Financial Indicators with Significant Changes and Reasons | Statement Item | Change Percentage | Reason | | :--- | :--- | :--- | | Financial Expenses | -1432.74% | Primarily due to a decrease in exchange losses | | Asset Impairment Losses | N/A | Primarily due to an increase in receivables and a change in bad debt provision policy in Q1 2013 | | Net Cash Flow from Investing Activities | N/A | Primarily due to the purchase of Sun Hung Kai bonds | [Appendix: Financial Statements](index=7&type=section&id=Item%20IV.%20Appendix) This appendix provides the company's consolidated and parent company financial statements, including balance sheets, income statements, and cash flow statements [Consolidated Balance Sheet](index=7&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2014, total assets were **CNY 12.96 billion**, up 2.56% from year-beginning, with total liabilities at **CNY 3.15 billion** and owners' equity attributable to the parent company at **CNY 9.64 billion**, up 1.32% Consolidated Balance Sheet Key Items | Item | Period-End Balance (CNY) | Year-Beginning Balance (CNY) | Change Percentage | | :--- | :--- | :--- | :--- | | Total Assets | 12,958,269,484.86 | 12,634,560,572.84 | +2.56% | | Total Liabilities | 3,153,350,566.92 | 2,952,375,767.03 | +6.81% | | Total Owners' Equity Attributable to Parent Company | 9,644,051,065.93 | 9,518,848,729.80 | +1.32% | [Parent Company Balance Sheet](index=10&type=section&id=Parent%20Company%20Balance%20Sheet) As of March 31, 2014, the parent company's total assets were **CNY 11.61 billion**, up 2.47% from year-beginning, with total liabilities at **CNY 2.37 billion** and total owners' equity at **CNY 9.24 billion** Parent Company Balance Sheet Key Items | Item | Period-End Balance (CNY) | Year-Beginning Balance (CNY) | Change Percentage | | :--- | :--- | :--- | :--- | | Total Assets | 11,610,075,872.70 | 11,330,355,898.12 | +2.47% | | Total Liabilities | 2,367,252,412.00 | 2,237,808,056.31 | +5.78% | | Total Owners' Equity | 9,242,823,460.70 | 9,092,547,841.81 | +1.65% | [Consolidated Income Statement](index=12&type=section&id=Consolidated%20Income%20Statement) In Q1 2014, consolidated total operating revenue was **CNY 1.70 billion**, down 14.71% year-over-year, with net profit attributable to parent company owners at **CNY 140.48 million**, a significant 63.39% decrease, and basic earnings per share at **CNY 0.09** Consolidated Income Statement Key Items | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 1,697,044,619.90 | 1,989,739,078.91 | -14.71% | | Operating Profit | 182,225,302.39 | 455,232,214.63 | -60.0% | | Net Profit Attributable to Owners of the Parent Company | 140,475,272.16 | 383,656,063.26 | -63.39% | | Basic Earnings Per Share | 0.09 | 0.24 | -62.5% | [Parent Company Income Statement](index=14&type=section&id=Parent%20Company%20Income%20Statement) In Q1 2014, parent company operating revenue was **CNY 1.33 billion**, down 14.20% year-over-year, with net profit at **CNY 130.28 million**, a 65.88% decrease, slightly larger than the consolidated decline Parent Company Income Statement Key Items | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,327,343,121.54 | 1,546,938,814.74 | -14.20% | | Net Profit | 130,275,618.89 | 381,835,757.60 | -65.88% | [Consolidated Cash Flow Statement](index=15&type=section&id=Consolidated%20Cash%20Flow%20Statement) In Q1 2014, net cash flow from operating activities was **-CNY 66.43 million**, a significant improvement from the prior year, while investing activities resulted in a **CNY 335.97 million** net outflow due to bond purchases, with period-end cash and cash equivalents at **CNY 2.30 billion** Consolidated Cash Flow Statement Key Items | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -66,427,216.50 | -253,634,572.71 | | Net Cash Flow from Investing Activities | -335,971,199.65 | -103,186,044.45 | | Net Cash Flow from Financing Activities | -67,221,894.33 | 65,914,604.23 | | Period-End Cash and Cash Equivalents Balance | 2,302,992,873.76 | 4,173,216,624.17 | [Parent Company Cash Flow Statement](index=17&type=section&id=Parent%20Company%20Cash%20Flow%20Statement) In Q1 2014, parent company net cash flow from operating activities was **-CNY 103.21 million**, an improvement from the prior year, with investing activities resulting in a **CNY 333.10 million** net outflow, and period-end cash and cash equivalents at **CNY 2.21 billion** Parent Company Cash Flow Statement Key Items | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -103,214,143.26 | -261,552,782.85 | | Net Cash Flow from Investing Activities | -333,096,862.91 | -64,807,221.61 | | Period-End Cash and Cash Equivalents Balance | 2,209,074,510.04 | 4,027,833,795.36 |

Financial Performance - In 2013, the company's operating revenue was CNY 8,055,310,629.98, a decrease of 21.13% compared to CNY 10,212,853,801.93 in 2012[22] - The net profit attributable to shareholders was CNY 866,712,374.60, down 45.46% from CNY 1,589,146,742.94 in the previous year[23] - The net cash flow from operating activities was negative at CNY -531,773,138.36, a decline of 253.07% compared to CNY 347,408,409.32 in 2012[23] - Basic earnings per share decreased by 52.68% to CNY 0.53 from CNY 1.12 in 2012[24] - The weighted average return on net assets was 9.27%, down 14.27 percentage points from 23.54% in 2012[24] - In 2013, the company achieved total operating revenue of CNY 8,055,310,629.98, a decrease of 21.13% compared to 2012, and net profit of CNY 836,981,091.25, down 48.13% year-on-year[31] - The total revenue for the industrial machinery segment was CNY 5,585,172,653.29, a decrease of 29.45% compared to the previous year, with a gross margin of 31.51%[51] - The total cost of goods sold for the industrial machinery segment was CNY 3,825,187,104.36, down 27.67% year-over-year[51] - The revenue from the trade segment increased by 29.74% to CNY 2,041,170,228.04, with a cost of goods sold of CNY 2,025,227,149.67, reflecting a gross margin of 0.78%[51] - The company’s coal machinery equipment revenue decreased by 46.03% to CNY 128,528,497.30, with a corresponding cost of CNY 108,176,597.10, resulting in a gross margin of 15.83%[52] Assets and Liabilities - The total assets at the end of 2013 were CNY 12,634,560,572.84, a decrease of 2.77% from CNY 12,995,138,846.64 in 2012[23] - The company’s total assets decreased by 14.32% to CNY 5,850,414,254.03 compared to CNY 6,828,256,520.57 in the previous year[45] - Cash and cash equivalents decreased by 40.04% to CNY 2,950,847,970.90, accounting for 23.36% of total assets[55] - The total amount of guarantees provided by the company to subsidiaries during the reporting period was RMB 15 million, which accounted for 1.55% of the company's net assets[109] - Total liabilities decreased from CNY 3,641,293,071.84 at the beginning of the year to CNY 2,952,375,767.03 at the end of the year, a reduction of approximately 18.9%[189] - Total assets decreased from CNY 12,995,138,846.64 at the beginning of the year to CNY 12,634,560,572.84 at the end of the year, a decline of about 2.8%[188] - Current liabilities decreased from CNY 3,536,885,822.76 to CNY 2,901,258,035.04, representing a decrease of approximately 17.9%[189] - Non-current liabilities decreased from CNY 104,407,249.08 to CNY 51,117,731.99, a reduction of about 51%[189] Market Position and Operations - The company maintained a leading market share, with a bidding win rate of 40.79%, an increase of 3.19% year-on-year, and direct orders accounting for 36.56% of total orders[33] - The company’s industrial output totaled 469,600 tons, a year-on-year decrease of 23%, with hydraulic supports production dropping by 39.89% to 13,095 units[40] - The company completed the production and operation of the TKI project in Turkey, marking successful overseas market expansion[34] - The company has developed a global market presence, successfully entering markets in Russia, India, and Turkey[61] - The company has established a comprehensive sales network covering all domestic coal-producing areas and has set up service centers nationwide[61] Research and Development - The company’s research and development expenses were CNY 203,192,359.32, a decrease of 34.26% from the previous year[42] - The company reported a total R&D expenditure of CNY 203,192,359.32, which represents 2.1% of net assets and 2.52% of operating revenue[49] - The company is focusing on technological innovation and product development in areas such as automation control technology and coal washing equipment[82] - The company plans to implement a comprehensive service model for equipment management, covering design, manufacturing, maintenance, and parts supply[83] Corporate Governance and Compliance - There are no non-operational fund occupations by controlling shareholders or related parties, ensuring compliance with decision-making procedures[5] - The company did not propose a cash dividend distribution plan despite having positive undistributed profits during the reporting period[102] - The independent directors did not raise any objections to the board's proposals during the reporting period, indicating a consensus on governance matters[173] - The company held four board meetings during the year, with all directors participating, demonstrating active governance engagement[172] - The audit opinion confirmed that the financial statements fairly represented the company's financial position and performance in accordance with accounting standards[178] Shareholder Information - The total number of shares held by foreign investors was 89,596,800, which accounted for 5.53% of the total shares[122] - The largest shareholder, the Henan Provincial Government State-owned Assets Supervision and Administration Commission, holds 32.14% of the shares, totaling 521,087,800 shares[131] - The second largest shareholder, HKSCC Nominees Limited, holds 14.99% of the shares, totaling 243,006,390 shares[131] - The total share capital of 1,621,122,000 shares, with 39.4% being limited shares and 60.6% being unrestricted shares[122] Employee and Management Information - The total number of employees in the parent company and major subsidiaries is 5,653, with 2,902 in the parent company and 2,751 in subsidiaries[153] - The company conducted 165 training programs in 2013, with a total of 8,265 employee training sessions[161] - The total remuneration paid to directors, supervisors, and senior management during the reporting period amounted to 9.2967 million RMB[151] - The total pre-tax remuneration for the management team amounted to 929.67 million yuan, with individual remuneration ranging from 8 to 82.18 million yuan[139] - The average remuneration for the management team was approximately 50 million yuan per person, reflecting a consistent compensation structure[139]