24H1 revenue/net profit to mother was +2%/11% YoY, of which Q2 net profit to mother was +21% month-on-month. 24H1 achieved revenue/net profit of 14.89/1.53 billion yuan, +2.3%/+10.5% year-on-year. In Q2, in a single quarter, the company's net profit to mother was 0.84 billion yuan, +21.4%/+10.3% month-on-year.

Coal machine orders continued to rise, and Q2 results hit a new quarterly high. The company closely focuses on the goal of “stable growth with one profit, continuous optimization at five rates”. Relying on the company's scientific and technological innovation and comprehensive advantages of the entire industry chain, the company focuses on enhancing the core functions of science and technology in the coal industry, promoting integrated synergy and efficiency in all aspects, the steady development of various businesses, and maintaining steady growth in operating efficiency. Four companies, including 24H1 Tiandi Benniu and Shanghai Coal Technology, signed a new contract of more than 2 billion yuan. Relying on overall technical advantages, Beijing Huayu successfully signed a turnkey project of 0.76 billion yuan, and the Mining Research Institute signed a contract of 0.45 billion yuan using leading technical advantages such as fracturing and rapid excavation.

Group, specialization, regionalization and internationalization accelerate development, and continuous innovation drives profit growth. In the first half of the year, the company accelerated the development of “groupings, specialization, regionalization and internationalization”. Chongqing Research Institute and Changzhou Co., Ltd. were selected as national manufacturing champions, 24H1 Changzhou shares achieved net profit of 0.114 billion yuan, +5% year-on-year; Xi'an Coal Transparent Geological Technology Co., Ltd. was selected by the State Assets Administration Commission to determine the first batch of sailing enterprises; Chongqing Kehua Safety Equipment Co., Ltd. was awarded “specialized, special and new” small and medium-sized enterprises. In addition, 24H1 Tiandi Benniu achieved net profit of 0.177 billion yuan, +18%; Tianma Intelligent Control achieved net profit of 0.203 billion yuan, or -7% compared to the same period. The new “ground planning coal mining, automatic equipment execution, and unmanned operation in the surface” unmanned coal mining model has been promoted and applied in large coal companies such as Shanneng, Ningmei, and Shaanxi Coal.

Actively participate in the “Belt and Road” joint construction and accelerate the pace of international development. The company actively implemented the “Guiding Opinions on Strengthening International Management”, accelerated the establishment of international management partnerships, participated in international mining exhibitions in Russia and Turkey, actively connected with customers from key coal companies in Russia, Indonesia, Uzbekistan and other countries, promoted the expansion of overseas markets, and successfully signed coal machinery equipment export projects such as targeted drilling rigs, sheavers, and tunneling machines. 24H1 establishes a Russian company to promote the expansion of overseas markets and accelerate the establishment of international management partnerships.

Profit forecasting and valuation. The coal machine industry is expected to usher in an upward boom cycle, and the company, as an industry leader, is expected to benefit significantly. We expect the company's net profit to be 2.7/3.2/3.65 billion yuan for 24-26, and the corresponding EPS is 0.67/0.77/0.88 yuan. Referring to comparable companies, we will give 12 to 14 times PE in 2024, corresponding to a reasonable value range of 8.09 to 9.44 yuan, maintaining the “superior to the market” rating.

Risk warning. Downstream demand has been drastically reduced, and the cost of raw steel has risen sharply.