Core views

The company released its 2024 semi-annual report. In the second quarter, the company achieved operating income of 13.223 billion yuan, a year-on-year decrease of 1.59%, and realized net profit attributable to mother of 1.054 billion yuan, an increase of 6251.60% year-on-year, and realized net profit deducted from non-mother of 1.373 billion yuan, an increase of 9789.26% year on year.

In the first half of the year, fans and parts achieved sales revenue of 12.8 billion yuan, accounting for 63.2% of revenue, which was basically the same. The gross margin of fans was 3.75%, an improvement over the previous year. In the first half of 2024, the company achieved revenue of 4.401 billion yuan, an increase of 31.49% over the previous year, and realized gross profit of 2.484 billion yuan, accounting for 67% of the total gross profit of the business. As of the end of June 2024, the company had a total number of active orders of 38.4 GW, including a total of 35.6 GW of external orders. Orders with a capacity of 4-6 MW account for 33%; orders with a capacity of 6 MW and above account for 65%.

occurrences

The company released its 2024 mid-year report. In the first half of 2024, the company achieved operating income of 20.202 billion yuan, a year-on-year increase of 6.32%, achieved net profit of 1.387 billion yuan, an increase of 10.83% over the previous year, and achieved net profit deducted from non-mother of 1.373 billion yuan, an increase of 33.01% over the previous year.

In the second quarter of the 2024 annual receipt, revenue was 13.223 billion yuan, down 1.59% year on year, up 89.46% month on month, realized net profit of 1.054 billion yuan, up 6251.60% year on year, up 216.94% month on month, and realized net profit without return to mother of 1.373 billion yuan, up 9789.26% year on year, and 216.72% month on month.

Brief review

Fans: 2024H1's fans and parts achieved sales revenue of 12.8 billion yuan, accounting for 63.2% of revenue, which was basically the same as the previous year. The fan gross margin was 3.75%, an improvement over the previous year. In the first half of the year, the company achieved an external sales capacity of 5.15 GW, a year-on-year decrease of 10.9%. In the first half of the year, 6MW and above units became the company's main model, and sales capacity increased 97.05% year-on-year.

Orders: As of the end of June 2024, the company's total number of active orders was 38.4GW, of which the total number of external orders was 35.6GW. Orders with a capacity of 4-6 MW account for 33%; orders with a capacity of 6 MW and above account for 65%.

Wind farm development business: The installed scale of equity continues to grow, and the transfer of wind farms for power generation contributes mainly to profits. In the first half of 2024, the company's wind farm development achieved gross profit of 2.484 billion yuan, accounting for 67% of the total gross profit of the business. (1) Existing power plants: As of the end of June 2024, the company's domestic and foreign self-operated wind farms had a total installed capacity of 8.14 GW and an equity capacity of 3.69 GW under construction. In the first half of 2024, 1.08 GW of grid-connected installed capacity was added.

(2) Wind farm transfer: In the first half of the year, the company sold 225 MW of wind farms, generated 0.94 billion yuan in revenue from power plant products, and 0.105 billion yuan in investment income from the transfer of shares in wind farm projects.

The gross margin of the fan business continued to be under pressure, and sales capacity declined year on year: in the first half of 2024, the company achieved sales revenue of 120.8 billion yuan, accounting for 63.2% of revenue, which was basically the same; in the first half of the year, the company achieved external sales capacity of 5.15 GW, a decrease of 10.9% year on year. Units of 6 MW and above became the company's main model in the first half of the year, and sales capacity increased 97.05% year on year. The gross margin of the fan was repaired in the first half of 2024. The gross margin of the company's fan was 3.75% in the first half of 2024. It was disclosed as 3.64% for the same period last year. After retroactive adjustments according to the same caliber, the gross margin increased by 6.3 pct over the same period last year, and the gross margin has improved. The market's focus on fan companies is still the extent to which gross margin has improved. Judging from Goldwind's performance in the first half of 2024, gross margin has improved year over year.

Industrial fan tenders increased dramatically in the first half of 2024, and fan prices fell year-on-year: According to Goldwind Technology statistics, in the first half of 2024, the domestic public tender market added 66.1 GW of new tenders, an increase of 48% over the previous year. Among them, 60.7 GW of new tender capacity was added on land and 5.4 GW of offshore tendering capacity was added.

In June 2024, the average bid price for wind turbines from wind power suppliers in the entire market was 1,465 yuan/kW, a year-on-year decrease of 11%.

There are plenty of on-hand orders, mostly high-volume orders: As of the end of June 2024, the company had a total number of active orders of 38.4 GW (30.4 GW at the end of 2023), with a total of 35.6 GW of external orders (29.8 GW at the end of 2023). Judging from the external order volume distribution, orders with a capacity of 4-6 MW account for 33%; orders with a capacity of 6 MW and above account for 65%.

The share of wind farm development business revenue continued to increase, and the installed equity scale continued to grow, and wind farm transfers contributed to the main profit: in the first half of 2024, the company's wind farm development business achieved revenue of 4.401 billion yuan, an increase of 31.49% over the previous year, and realized gross profit of 2.484 billion yuan, an increase of 7.02% over the previous year, accounting for 67% of the total gross profit of the business. (1) Existing power plants: As of the end of June 2024, the total installed capacity of the company's domestic and foreign self-operated wind farms was 8.14 GW (7.29 GW at the end of 2023). In the first half of 2024, 1.08 GW of grid-connected installed capacity was added; as of the end of June 2024, the company's domestic wind farm equity capacity was 3.69 GW. (2) Wind farm transfer: In 2024, the company included some wind farm transfers in its main business (power plant products under wind farm development). In the first half of the year, the company sold 225 MW of wind farms (80 MW in the first quarter); the revenue from power plant products was 0.94 billion yuan, and the investment income from the transfer of shares in wind farm projects was 0.105 billion yuan.

Profit forecast and valuation: We expect the company's 2024-2026 revenue to be 53.059, 60.077 and 68.151 billion yuan, respectively, and the estimated net profit to mother will be 2.682, 3.207, and 3.857 billion yuan, respectively, corresponding PE 13.0, 10.9, and 9.0 times, respectively.

Risk analysis

1. The promotion of wind power planning policies falls short of expectations;

2. The promotion of the Haifeng project falls short of expectations: wind power project construction volume and construction progress falling short of expectations will affect the large-scale development of the industry; 3. Increased industry competition will damage the profitability of the industry: overall competition in the wind power industry is fierce. If industry competition intensifies, further fierce price wars will damage the profits of enterprises within the industry;

4. The industry's cost reduction falls short of expectations: large-scale development of ocean wind also requires reliance on various upstream components to reduce costs. Upstream cost reduction falls short of expectations and will affect the large-scale promotion and development of deep-sea wind power;

5. Risk of fluctuations in raw material prices: Upstream raw materials for wind power are mainly steel, etc., and large fluctuations in the price of steel etc. will cause risks in response to the profit stability of corresponding enterprises.