The semi-annual report performance increased 6.45% year on year, which is basically in line with expectations. In the first half of 2012, the company achieved operating income of 834.36 million yuan, up 3.68% year on year; net profit attributable to shareholders of listed companies was 76.45 million yuan, up 6.45% year on year. The company expects the half-year performance to increase by 0-20% in the first quarter, which is basically in line with expectations. Obtain safety standards for mining equipment and strengthen comprehensive mining integration capabilities. The company has successfully obtained safety standard certificates for tunneling machines and coal mining machines, and has achieved sales. It has strengthened the company's ability to complete comprehensive coal mining equipment, which can better adapt to customer needs and enhance the company's market competitiveness. The company's sub-business operations are basically stable. The company's conveying equipment (scraper conveyors and belt conveyors) revenue increased slightly by 3.36% year on year, and gross margin decreased slightly; revenue of support equipment (single hydraulic pillars and hydraulic supports) increased 14.8% year on year, and gross margin decreased by 2.15 percentage points year on year; mining equipment (tunneling machines and coal mining machines) revenue scale was 790,000 yuan, and the market development period is still in the market development period. The company's transportation equipment and support equipment business accounts for 89% of revenue, and the operation is basically stable. Since the company has strong comprehensive equipment capabilities for thin coal seam mining, it is expected to benefit from thin coal seam mining in Yunguichuan and Xinjiang regions in the future. The subsidiary became a profit highlight. In the first half of the year, the company's holding subsidiaries achieved good business performance. Among them, Shandong Mining Machinery Maike Building Materials Machinery Co., Ltd., Shandong Mining Machinery Group Laiwu Coal Machinery Co., Ltd. and Xinjiang Chang Coal Mining Machinery Co., Ltd. each achieved relatively rapid growth, and the development momentum was good. These three subsidiaries account for 18% of the company's net profit, which is worth paying attention to. Implementing a major customer strategy is beneficial to long-term development. The company implemented a “big customer” strategy and set up separate subsidiaries with Guizhou Power Energy Co., Ltd. and Pingmei Shenma Machinery and Equipment Group in the first half of the year to carry out coal machine business. Since the company's customers were scattered until now, through cooperation with major customers, the company is expected to increase revenue scale and profit level, which is beneficial to long-term development. The target price is 6.01 yuan, maintaining the “increased holdings - B” rating. Many of the company's businesses are still in the market expansion period, and considering the intensification of competition in the coal machine market, it is difficult for the company's business to grow significantly in the short term. In the long run, the company still has a lot of room for development. In 2012-2014, the company's EPS is expected to be 0.29, 0.33, and 0.39 yuan respectively, which is 18 times PE in 2013, and the corresponding target price is 6.01 yuan, maintaining the “increased holdings - B” rating. Risk warning: risk of bad debts due to tight financial resources for downstream customers; risk of equity investment; risk of sharp contraction of market orders.