Financial Performance - The company achieved operating revenue of CNY 3,182,574,533.38 in the first half of 2014, a decrease of 15.75% compared to the same period in 2013[20]. - Net profit for the first half of 2014 was CNY 247,733,731.70, down 53.18% year-on-year[20]. - Basic earnings per share decreased by 54.55% to CNY 0.15 compared to CNY 0.33 in the same period last year[18]. - The weighted average return on net assets fell to 2.57%, a decrease of 3.11 percentage points from the previous year[18]. - The operating cost decreased by 8.72% to CNY 2,556,973,114.19, resulting in a gross profit margin of 19.6%[23]. - The company reported a net profit attributable to shareholders after deducting non-recurring gains and losses of CNY 234,807,160.85, down 55.91% from the previous year[19]. - Total operating revenue for the first half of 2014 was CNY 3,182,574,533.38, a decrease of 15.8% compared to CNY 3,777,635,504.72 in the same period last year[79]. - Net profit for the first half of 2014 was CNY 247,733,731.70, a decline of 53.2% compared to CNY 529,114,222.04 in the previous year[79]. - Earnings per share decreased to CNY 0.15 from CNY 0.33, reflecting a 54.5% drop[79]. Cash Flow and Investments - The company reported a net cash flow from operating activities of CNY 52,780,298.10, a significant improvement from a negative cash flow of CNY -558,058,365.22 in the previous year[19]. - The net cash flow from operating activities improved significantly to CNY 52,780,298.10, compared to a negative cash flow of CNY -558,058,365.22 in the previous year[23]. - The total investment amount for the reporting period was 400,000,000 CNY, representing a decrease of 97.29% compared to the previous year's investment of 14,765,590,000 CNY[32]. - The company has invested a total of 1,005,000,000 CNY in various wealth management products, with expected returns of 19,671,414.36 CNY[36]. - The company provided entrusted loans totaling 100,000,000 CNY to subsidiaries, with expected returns of 3,360,000 CNY[37]. - The company has invested 60 million USD in tradable bonds issued by New Hongji Company, with an expected return of 5.4 million USD[39]. Market Position and Strategy - The hydraulic support winning bid tonnage accounted for 42.9% of the total market bidding volume, with the winning bid amount also at 42.6%, leading the industry[20]. - The company has a 30% market share in the domestic hydraulic support product market, with a 60% share in high-end products[28]. - The company has successfully developed international markets in Russia, India, and Turkey, establishing long-term strategic partnerships with several coal industry groups[28]. - The company is actively exploring mergers and acquisitions in three key areas: industrial automation equipment manufacturing, LNG and its equipment, and coal mining machinery[21]. Assets and Liabilities - The company's net assets attributable to shareholders were CNY 9,501,865,645.03, a slight decrease of 0.18% from the end of the previous year[19]. - Total assets increased by 3.75% to CNY 13,108,439,441.39 compared to the end of the previous year[19]. - The company's total liabilities reached RMB 3,443,460,319.68, up from RMB 2,952,375,767.03 at the beginning of the year, indicating a significant increase in financial obligations[70]. - Cash and cash equivalents decreased to RMB 2,235,191,293.16 from RMB 2,950,847,970.90, reflecting a decline of approximately 24.2%[67]. - Accounts receivable increased to RMB 3,926,422,614.43 from RMB 3,745,228,034.85, showing a growth of about 4.8%[67]. - Inventory levels rose to RMB 1,745,617,294.90 from RMB 1,639,357,831.45, representing an increase of approximately 6.5%[67]. Shareholder Information - The number of shareholders at the end of the reporting period was 61,960, with 61,845 holding A shares and 115 holding H shares[59]. - The company distributed a cash dividend of RMB 1.65 per 10 shares, totaling RMB 267.49 million, which accounts for 30.86% of the net profit attributable to shareholders for the year[45]. - The company has not reported any legal disputes related to its investments or financial activities during the reporting period[39]. - The company has not engaged in any related party transactions in its wealth management and entrusted loan activities[36]. Financial Reporting and Compliance - The company's financial statements are subject to audit and must comply with regulatory requirements, ensuring transparency and accountability[100]. - The company’s financial reports reflect its commitment to transparency and adherence to regulatory requirements, as mandated by the China Securities Regulatory Commission[106]. - The company’s accounting period runs from January 1 to December 31 each year, aligning with standard fiscal practices[107]. - The company has established a comprehensive accounting policy for mergers and acquisitions, including the treatment of goodwill and the measurement of identifiable assets and liabilities at fair value[110]. Research and Development - Research and development expenses decreased by 37.46% to CNY 77,882,910.77 due to a decline in revenue[23]. - The company has not reported any new product launches or technological advancements in the current financial period[92]. Impairment and Provisions - The company experienced a significant increase in asset impairment losses, which rose to ¥91,644,881.01 from ¥7,071,993.99 in the previous period[82]. - The company recognizes impairment losses for inventory when the net realizable value is lower than the cost, with a recovery of previously recognized impairment losses if the factors causing the impairment have ceased[152]. - Long-term equity investment impairment losses, once recognized, are not reversed in subsequent periods[165].

[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]