Huayuan Securities Maintains "Buy" Rating on Goldwind (02208), Bullish on Wind Power Sector Recovery and Profitability Improvement

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Huayuan Securities reiterated its "Buy" rating on Goldwind Science & Technology Co., Ltd. (02208), citing strong performance in the first three quarters with revenue and net profit attributable to shareholders increasing by 34.3% and 44.2% year-on-year, respectively. The growth was primarily driven by robust demand in the wind power sector, with turbine sales surging 90% YoY and gross margins showing continuous improvement. Supported by China's 15th Five-Year Plan for wind power installations and rising turbine prices, the company's profitability is expected to further recover.

Key highlights from Huayuan Securities' report: 1. **Financial Performance**: - Q1-Q3 revenue reached RMB 48.15 billion (+34.3% YoY), with net profit at RMB 2.58 billion (+44.2% YoY). - Q3 revenue stood at RMB 19.61 billion (+25.4% YoY), while net profit soared 170.6% YoY to RMB 1.097 billion.

2. **Turbine Sales & Margins**: - Turbine sales volume hit 18.4GW (+90% YoY) in Q1-Q3, including 7.8GW (+124% YoY) in Q3, becoming the primary revenue driver. - Overall gross margin improved to 13% in Q3 (+0.84 ppts QoQ), with turbine margins likely on an upward trajectory.

3. **Order Backlog**: - As of September 30, order backlog totaled 52.5GW (+18.5% YoY), including over 7GW from overseas markets.

4. **Power Generation Capacity**: - The company added 745MW of grid-connected capacity in Jan-Sep and sold 100MW of wind farms. - Self-owned installed capacity reached 8,688MW, with an average utilization rate of 1,730 hours, outperforming the national average.

5. **Sector Outlook**: - The "Beijing Wind Energy Declaration 2.0" targets annual wind power additions of at least 120GW during the 15th Five-Year Plan period. - Turbine prices rebounded to RMB 1,610/kW in September, signaling further profitability recovery.

6. **Earnings Forecast & Valuation**: - Huayuan raised its 2025-2027 net profit forecasts to RMB 3.08/4.83/5.75 billion (from RMB 2.66/3.85/4.47 billion), implying 65%/57%/19% YoY growth. - Current PE multiples stand at 15x/9x/8x for 2025-2027. The firm expects turbine manufacturing margins to bottom out and recover, supporting the "Buy" rating.

**Risks**: Intensifying turbine competition, unexpected declines in renewable energy tariffs, and slower subsidy collections.

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