Performance grew steadily, and cash flow increased substantially. In 2023, the company achieved operating income of 29.928 billion yuan, up 9.16% year on year; net profit attributable to shareholders of listed companies was 2,358 billion yuan, up 20.81% year on year; net cash flow from operating activities was 5.770 billion yuan, up 23.67% year on year.

Assets have grown steadily, and overall quality has improved. Total assets were $53.232 billion, up 22.53% year on year, and net assets attributable to shareholders of listed companies were 22.941 billion yuan, up 12.61% year on year. Of this, monetary capital was 17.026 billion yuan, an increase of 46.08% over the previous year. Accounts receivable accounted for 18.40% of total assets and continued to decline.

Orders continue to grow, and future growth can be expected. In 2023, new contracts amounted to 36.99 billion yuan for the whole year. Units such as Xi'an Research Institute, Shanxi Coal Machine, Tiandi Wangpo, Tiandi Benniu, and Shanghai Coal Science signed new contracts worth more than 3 billion yuan. The amount of new contracts signed by Xi'an Research Institute and Shanxi Coal Machinery increased by more than 20% over the same period last year.

Increase the dividend rate to reward investors. In 2023, the company paid a cash dividend of 2.8 yuan (tax included) for every 10 shares, accounting for 49.14% of net profit attributable to shareholders of the parent company in 2023, an increase of 6.74 pct compared to 2022, making it the highest dividend ratio in history. At the closing price on March 22, the company's dividend ratio was 4.13%.

With the steady improvement of the company's operations, the dividend rate is still expected to increase in the future.

Investment advice: Maintain 24-25 profit forecasts and maintain a “buy” rating.

The company's revenue for 2024-2026 is expected to be RMB 334.1/364.7/RMB 39.87 billion, and net profit attributable to the parent company is RMB 26.3/29.2/RMB 3.19 billion, respectively, and earnings per share of RMB 0.64/0.71/0.77, respectively. Considering the stable pattern of the coal machine industry, in the future, as coal production capacity and output increase, the overall demand for coal machine replacement will increase, and industry concentration will increase under the trend of intelligent development. As a leading coal machine company in the central government, the company has high-end products. Future performance is expected to grow steadily, the company's dividends will increase, and maintain a “buy” rating.

Risk warning: The economic slowdown will lead to a decline in coal demand, a slowdown in fixed asset investment, the impact of production safety accidents, and the risk that accounts receivable will not be repaid in a timely manner.