Event: the company released three quarterly reports that in the first three quarters of 2023, revenue reached 21.905 billion yuan, an increase of 10.27% over the same period last year. The net profit returned to the mother was 1.972 billion yuan, an increase of 23.23% over the same period last year. The net profit after deducting 1.91 billion yuan, an increase of 23.59% over the same period last year, was in line with expectations.

Steady growth in performance, intelligent products promote profitability. In the third quarter alone, the company achieved revenue of 7.35 billion yuan, an increase of 10.07% over the same period last year, and a net profit of 585 million yuan, an increase of 28.55% over the same period last year. After deducting 563 million yuan, the net profit increased by 27.84% over the same period last year. In terms of profitability, the company's Q3 gross profit margin is about 31.92%, an increase in 2.04pct over the same period last year, a net profit rate of 10.63%, an increase in 2.31pct over the same period last year, and an improvement in profitability, mainly due to the increase in the proportion of intelligent business with high gross margin.

Under the development trend of coal mine intelligence, the company has made continuous breakthroughs in the field of intelligent equipment. From the first half of the year, the company's major coal machinery equipment manufacturing enterprises signed orders continued to increase, Xi'an Research Institute, Tiandi Wangpo, Tiandi Benniu, Shanghai Coal Science newly signed contracts exceeded 2 billion yuan. As a leading enterprise in the field of coal machinery, in the field of intelligent equipment, the "Coal Weilong" intelligent full-section combined shield tunneling equipment with a diameter of 3.66 meters has been successfully developed, and the driving speed has been increased by more than three times. it has created a new technology for driving rock roadway in domestic coal mines. The developed 10-meter super-large mining height scraper conveying equipment fills the blank of the conveying equipment in the 10-meter super-large mining height working face and provides technical support and equipment support for the sustained and stable production of coal energy in our country. The independently developed 1000kW series fracturing pump system with independent intellectual property rights has successfully completed the industrial test of gas permeability enhancement and extraction in Dongli Coal Mine, Guizhou Province. Safety in production is the first priority. Coal mine intelligence can improve production efficiency, improve safety level, and reduce labor costs, which is in line with the future development trend of coal mines in our country. As a leading enterprise in the field of coal machinery, the company will continue to benefit from the wave of intelligent transformation of coal mines.

Investment suggestion: we expect the company to achieve a return net profit of 24.39,27.57 and 3.247 billion yuan respectively from 2023 to 2025, and the corresponding PE is 7.977.77 times of 9.01. The company's leading enterprises in the field of coal machinery will fully benefit from the wave of intelligent transformation of coal mines and are optimistic about the long-term development of the company. Cover for the first time and give a "recommended" rating.

Risk hints: macroeconomic fluctuation risk, coal price downward risk, downstream capital expenditure downside risk, raw material price fluctuation risk