The gross margin of fan and parts sales increased slightly year on year, and the gross margin of overseas business was +5.77pct year on year. (1) In 24H1, the company's gross margin of fan and parts sales increased slightly year-on-year, and the gross margin of overseas business was +5.77pct year-on-year. By product, 24H1, the company's fan and parts sales/wind farm development/wind power service revenue accounted for 63.20%/21.79%/11.75% respectively, gross margin was 3.75%/56.44%/24.77%, gross margin was +0.11pct/-12.89pct/+9.62pct, respectively; by region, 24H1, the company's domestic/overseas revenue accounted for 76.35%/23.65%, respectively. The corresponding gross margin was 18.63%/17.02%, respectively, and gross margin + 0.41pct/+5.77pct. (2) The share of sales capacity of 6MW and above models increased significantly by 21.10pct to 57.64%. From January to September 2024, the company's wind turbines achieved an external sales capacity of 9.71 GW, accounting for 57.64% of 6MW and above, +21.10pct compared to the previous year. We believe it is mainly due to the continuous acceleration of the large-scale expansion process of wind power units in the wind power industry. (3) Net profit to mother from January to September 2024 was +42.14% year-on-year. From January to September 2024, the company's revenue was 35.839 billion yuan, +22.24% year over year; net profit to mother was 1.792 billion yuan, +42.14% year over year.

Global wind power added 9.4% CAGR of installed capacity in 2023-28, and the company maintained its leading position in the industry. (1) Market space. According to GWEC statistics, the world added 116.6 GW of wind power installed capacity in 2023, of which China added 75.79 GW. The world is expected to add 182 GW in 2028, and the CAGR for 2023-2028 is 9.4%.

Of these, the offshore CAGR was 27.5%. (2) The competitive landscape. According to CWEA statistics, the concentration of CR10 in the 2023 industry reached 98.4%; the company's share in the domestic market was 19.7%, and the market share continued to rank first in the country. According to BloombergNEF statistics, the company ranked top in the world in the 2023 global market.

Overseas fan giants are reducing the scale of their business, and the company's overseas share is expected to increase. (1) There are sufficient orders in hand, and the number of successful projects ranks first in the country. By the end of September 2024, the company's external orders totaled 41.38 GW, up 38.21% year on year; of these, overseas orders were 5.54 GW, up 45.48% year on year.

According to statistics from China Wind Power News Network, from January to September 2024, the company ranked first among domestic manufacturers with 20.96 GW and 3.27 GW respectively, accounting for 18.35%/38.19% of the total number of domestic/overseas bid wins, respectively. (2) Domestic onshore fan prices may have bottomed out, and gross margin is expected to increase. From May to September 2024, the lowest bid price for onshore fans (including towers) was raised from 1,471 yuan/kw to 1,699 yuan/kw, and the highest price remained stable. We believe that the gross margin of fans is expected to increase as the rate of onshore large-scale expansion slows down in the future. (3) Overseas fan giants have shrunk their business, and the company's overseas share is expected to increase. As of September 2024, the company's international business has accumulated 8.05 GW of installed capacity, of which the installed capacity in North America, Oceania and South America has all exceeded 1 GW, and exceeded 2 GW in Asia (excluding China). GE Vernova announced on September 20 that it plans to reduce the size of its offshore wind power business, according to Interface News. On May 8, Siemens Energy's wind power division Siemens Gamesa initiated comprehensive restructuring measures and long-term strategic development steps, including layoffs. We believe that while overseas giants are in crisis due to quality and other issues, domestic fan companies have been provided with greater opportunities to enter overseas markets, and Chinese OEMs have ushered in new opportunities for overseas development.

Profit forecast and valuation suggestions: The company's net profit due to mother in 2024-2025 is estimated to be 2.609 billion yuan and 3.374 billion yuan respectively, corresponding to EPS of 0.62 and 0.80 yuan/share. Since the company is the world's number one wind power mainframe manufacturer and is leading overseas development, the company was given 14-18X PE in 2025 based on comparable company valuations, with a reasonable value range of 11.2-14.4 yuan, giving it a “superior to the market” rating.

Risk warning: Increased competition, risk of component price increases, overseas & sea breeze market development falls short of expectations, etc.