Soochow Securities: Onshore Wind Installations Remain Strong, Bullish on Offshore Growth in the 15th Five-Year Plan

Stock News12-15

Soochow Securities released a research report projecting China's offshore wind installations to reach 8–10GW in 2025 and 11–13GW in 2026, a year-on-year increase of over 30%. During the 15th Five-Year Plan period (2026–2030), annual installations are expected to average 20GW+. Domestic deep-sea wind projects are nearing policy catalysts, with long-term installation potential likely to be revised upward. Overseas auctions, final investment decisions (FIDs), and installation progress are accelerating, potentially driving synchronized growth in domestic and international markets by the 15th Five-Year Plan. Rising turbine bidding prices signal a profitability inflection point in 2026. The firm recommends focusing on offshore wind and turbine sectors.

Key insights include: 1) **Onshore Wind**: Installations are expected to exceed 100GW in 2025, up over 25% YoY. Bidding for onshore turbines reached 88GW from January to November 2025, down 11% YoY. Given wind power's cost competitiveness, installations in 2026 are projected to remain stable, with annual averages of 110–120GW during the 15th Five-Year Plan. 2) **Offshore Wind**: Bidding for offshore wind projects totaled 9.4GW from January to November 2025, up 7% YoY. Deep-sea policy and project catalysts are imminent, supporting long-term growth.

**Europe’s Offshore Wind Expansion Accelerates** Post-Russia-Ukraine war energy concerns have spurred European countries to ramp up offshore wind plans: - **Auctions**: 20GW in 2024 (+46% YoY), with 34.7GW, 23.2GW, and 30.2GW expected in 2025–2027. - **FIDs**: New offshore wind FIDs reached €3.56B in 2023 and €790M in 2024, signaling accelerated installations in the next 2–3 years. - **Installations**: 2.6GW in 2024, with Wind Europe forecasting 8.4GW, 6.5GW, and 6.7GW in 2026–2028, rising to 9.7GW in 2029 and 11.8GW in 2030—a 21% CAGR from 2025–2030. - **Floating Wind**: Entering pre-commercialization, GWEC expects 1GW of global floating wind capacity by 2030, led by the UK, South Korea, and China. Cost reductions and technological advancements rely on China’s supply chain.

**Subsea Cables**: Voltage upgrades and market consolidation continue. The subsea cable market is projected to grow 62% YoY to ¥10.7B in 2025, reaching ¥34.3B by 2030 (26% CAGR). Recent bids show stable 35–40% gross margins for 220kV cables and 45–55% for 500kV AC/±500kV HVDC cables. Overseas demand-supply gaps (¥10–20B annually) present export opportunities, with Chinese firms securing initial orders.

**Towers & Foundations**: Domestic profitability is rebounding from Q2 2025, while overseas expansion (e.g., monopile deliveries) is driving higher margins and market share.

**Turbines**: Prices have stabilized with a 5%+ rebound, and cost efficiencies via technology/supply chain improvements may boost profitability in 2026. Overseas orders are expanding, with gross margins 5–10pp higher than domestic sales.

**Risks**: Intensifying competition, policy shifts, installation shortfalls, and raw material volatility.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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