Taisheng Wind Energy has been deeply involved in the wind power equipment industry for many years, focusing on the R&D and manufacture of wind power towers, pipe piles and other products.

The company was founded in 2001 and changed to a state-owned holding company in 2022. The actual controller is the Guangzhou Economic and Technological Development Zone Management Committee. Since its establishment, the company has focused on R&D and manufacturing of wind power towers, and entered the field of offshore wind power equipment in 2013, forming a business model for collaborative development in the field of “land wind+sea wind”. As a new batch of wind power projects progressed in an orderly manner, domestic demand for wind power gradually picked up in 2023, and the company's overall performance also showed an improvement trend. In the first three quarters of 2023, the company achieved revenue of 2,978 billion yuan, a year-on-year increase of 40.29%, and achieved net profit of 236 million yuan to mother, an increase of 41.82% over the previous year.

In the context of “sea breeze+going out to sea” demand resonates, wind power tower and pipe pile companies are expected to fully benefit. In the context of carbon neutrality, domestic land wind installations are expected to continue to grow, and ocean wind still has a lot of room for development. According to our estimates, the total market size of wind power towers and pipe piles in 2025 will be 50 billion yuan, double the increase from 2022, of which land wind and sea wind will be 23.6 billion yuan and 264 billion yuan respectively. In terms of overseas markets, the Asia-Pacific region is an emerging market for wind power, and the future increase in wind power installations is quite impressive. According to GWEC, the Asia-Pacific region (excluding mainland China) will add 4.39 GW of installed capacity in 2022, and is expected to reach 12.30 GW by 2027, with a CAGR of 22.88% in 22-27. Benefiting from a better competitive pattern and the continuous improvement of anti-dumping measures against China in key countries, domestic wind tower companies have ushered in better opportunities to go overseas.

Actively expand production to meet demand, and the overseas business continues to grow. (1) The company actively expands the highly profitable “Sea Breeze+Offshore” production capacity, which helps maintain stronger and more stable profitability. The company has advantages in production capacity, terminals, etc., and is expected to continue to increase its market share in the future. (2) In recent years, the company's overseas business has continued to grow, and its export products have a higher gross profit margin; compared with other domestic competitors, one of Taisheng Wind Energy's advantages is that it accounts for a relatively high share of overseas revenue. The company has strong competitiveness in the overseas wind power market. With the gradual release of production capacity at export bases, the scale of overseas business is expected to grow further in the future. (3) The company's state-owned background is conducive to enhancing its resource integration capabilities and financial strength; in addition, the company actively explores wind farm development and other businesses. It already owns a 50MW wind farm project, and is expected to form collaborative business development in the future.

The first coverage gave it a “buy” rating: Taisheng Wind Energy is deeply involved in wind power equipment manufacturing, and has focused on developing the “sea breeze+overseas” market with higher growth in recent years. The company is actively promoting the layout of the Seabreeze manufacturing base in the southern region, which is expected to open up room for growth in the Haifeng business; in addition, the company accounts for a relatively high share of overseas revenue and is highly competitive in the Asia-Pacific market. As export capacity is gradually released, overseas business will continue to gain strength. We estimate that the company's net profit for 23-25 will be 418/637/816 million yuan, respectively, the corresponding EPS will be 0.45/0.68/0.87 yuan, and the current stock price corresponding to 23-25 PE will be 22/14/11 times, respectively. Comparative valuation and absolute valuation are taken into account, covered for the first time, and given a “buy” rating.

Risk warning: risk of changes in industry policies, risk of wind power project construction falling short of expectations, risk of international trade risk, risk of fluctuating raw material prices, risk of overcapacity in the industry.