The wind power sector continues to recover. In Q1-Q3 2024, the newly installed wind power capacity was 39.1GW, an increase of +16.8% year-on-year, with sea/land additions of 2.5/36.7GW respectively, an increase of +72.7%/+14.4%.
Smart Finance News App learned that Huachuang Securities released research reports stating that the wind power sector continues to recover. In Q1-Q3 2024, the newly installed wind power capacity was 39.1GW, an increase of +16.8% year-on-year, with sea/land additions of 2.5/36.7GW respectively, an increase of +72.7%/+14.4%. According to the latest project updates, it is expected to add 92GW for the whole year, with sea/land additions of 7/85GW respectively, an increase of +2.5%/+23.4%. In Q3 2024, the net income attributable to shareholders of submarine cables/whole machines increased year-on-year. The submarine cables sector benefited from the simultaneous volume addition of sea and land businesses, with a net income attributable to shareholders increasing by +7%; the whole machines sector benefited from the growth in shipments in the third quarter, improved cost control capabilities of the company, and the stabilization of wind turbine prices, resulting in a net income attributable to shareholders increasing by +2.7%.
Huachuang Securities' main views are as follows:
The bidding volume of wind turbines in Q1-Q3 2024 increased by +93% year-on-year, and it is expected that the sea/land installation will increase by +71%/+40% year-on-year in 2025.
The wind power sector continues to recover. In Q1-Q3 2024, the newly installed wind power capacity was 39.1GW, an increase of +16.8% year-on-year, with sea/land additions of 2.5/36.7GW respectively, an increase of +72.7%/+14.4%. According to the latest project updates, it is expected to add 92GW for the whole year, with sea/land additions of 7/85GW respectively, an increase of +2.5%/+23.4%. According to the performance materials of Goldwind Science & Technology, wind turbine bidding has increased significantly since 2024, with a bidding volume of 119.1GW in the first three quarters, an increase of +93%, including sea/land bidding of 7.6/111.5GW. With the approaching end of the "14th Five-Year Plan" and the highly prosperous bidding environment, it is expected that the wind power new installations in 2025 will reach 131GW, an increase of +42.4%, with sea/land additions of 12/119GW respectively, an increase of +71.4%/+40%.
Revenue in Q1-Q3 2024 increased year-on-year, with profits still under pressure.
Looking at the sample data, the wind power sector achieved revenue of 293.96 billion yuan in Q1-Q3 2024, an increase of +5.1%; attributable net income of 14.3 billion yuan, a decrease of -16.5%; gross margin was 15%, a decrease of -1.7 percentage points; net margin was 5.1%, a decrease of -1.3 percentage points. In Q3 2024, the wind power sector achieved revenue of 113.49 billion yuan, an increase of +9.8%; net income attributable to shareholders of 4.26 billion yuan, a decrease of -11.7%; gross margin was 13.6%, a decrease of -2.4 percentage points; net margin was 3.9%, a decrease of -0.9 percentage points.
In Q3 of 2024, the revenue of various sectors increased year-on-year, with the best performance in castings/forgings/machinery/cables.
Looking at different sectors, in terms of revenue scale, in 2024 Q1-3, the progress of wind power projects had a slight impact, with only machinery and cables showing year-on-year revenue growth. In Q3 of 2024, as projects in various provinces entered the peak construction season, the pace of component shipments significantly accelerated. Apart from tower foundations, the revenue of other sectors all showed year-on-year growth, with castings (+19.5%)/machinery (+16.4%)/cables (+12.8%) ranking in the top three in terms of growth rate.
In Q3 of 2024, cables and machinery benefited from increased deliveries and improved profitability, leading to a year-on-year increase in net income attributable to the parent company.
In 2024 Q1-3, only the anchor chain sector saw a year-on-year increase of +9.9% in net income attributable to the parent company, benefiting from factors such as lower raw material prices in the second quarter and increased net investment income. In Q3 of 2024, cables and machinery saw year-on-year increases in net income attributable to the parent company. The cable sector benefited from simultaneous increases in onshore and offshore businesses, with a year-on-year net income increase of +7%; the machinery sector benefited from increased shipments in the third quarter, improved cost control capabilities, and stabilization of turbine prices, with a year-on-year net income increase of +2.7%.
By the end of the third quarter, inventory and contractual liabilities in multiple areas saw a significant year-on-year increase, indicating the potential for performance growth in 2025. Based on sample data, by the end of Q3 2024, the wind power sector's inventory scale reached 102.63 billion yuan, a year-on-year increase of +11.9%; the contractual liabilities scale reached 55.05 billion yuan, a year-on-year increase of +29.1%. Looking at various subfields, the inventory of tower foundations, cables, machinery, and castings increased by +31.3%, +16.6%, +12.6%, and +11.9% respectively year-on-year; the contractual liabilities of castings, blades, cables, machinery, and tower foundations increased by +94.8%, 79.7%, 45.6%, 30.4%, and 9.5% year-on-year.
It is recommended to focus on three main themes in the wind power sector: the rush to install domestic offshore wind power, the prospect of intensive catalysis in offshore wind orders and projects, the wind power supply chain expanding overseas, with expectations of new market opportunities; the slowdown in main turbine price competition, leading to a potential turnaround in profitability.
Regarding investment targets, it is recommended to pay attention to Ningbo Orient Wires & Cables (603606.SH), Ming Yang Smart Energy (601615.SH), Jiangsu Zhongtian Technology (600522.SH), Hengtong Optic-Electric (600487.SH), Zhuzhou Times New Material Technology (600458.SH), Zhongji Union (605305.SH), Goldwind Science& Technology (002202.SZ), Windey Energy Technology Group (300772.SZ), Haili Wind Power (301155.SZ), Dajin Heavy Industry (002487.SZ), Sany Heavy Energy (688349.SH), Shanghai Taisheng Wind Power Equipment (300129.SZ), Mingyang Electric (301291.SZ), Zhejiang Wanma (002276.SZ), and others.
Risk Warning: If wind power installations fall short of expectations, overseas market development fails to meet expectations, and fluctuations in commodity prices occur.
