Goldwind Technology can be held for a long time for the following reasons:
1. A leading domestic wind turbine manufacturer and comprehensive solution provider. The company is one of the companies with the longest history in the domestic wind power equipment manufacturing industry. Its main business is the research and development, manufacturing and sales of wind turbines. It also provides comprehensive wind energy services and develops wind farms for sale. In 2009, the company added 2.72 million kilowatts of newly installed capacity, accounting for 19.7% of the domestic market share. In terms of newly installed capacity, the company is the second largest wind turbine manufacturer in China and the fifth largest wind turbine manufacturer in the world.
2. Technological development and configuration of production capacities constitute a good basis for continued growthinue. The company has established three R&D centers in Beijing, Urumqi and Neunkirchen, Germany, and has mastered the self-reliance of wind power core technology. In addition to its headquarters in Xinjiang, it has established several production bases in Beijing, Inner Mongolia, Gansu and Germany, which can radiate to major domestic wind resource areas. It is expected that by the end of 2010, the company's megawatt wind turbine production capacity will reach more than 3,000 units.
3. A decline in industry growth is a highly probable event. Difficulties in accessing wind energy have become the main factor limiting the development of the industry, although difficulties in accessing wind energy are best resolved, based on the estimated installed capacity of the national wind energy reaching 150 to 200 million kilowatts in 2020, the annual average. The compound rate of wind capacity wevelly installed over the next ten years will be around 10 to 16%, which is still well below the level of previous years. We forecast that in 2010 and 2011 the growth rate of. the newly installed wind capacity will be between 20 and 30%.
4. Industrial competition has intensified and the price of wind turbines has accelerated. The unit price of 1.5 MW wind turbines increased from 6,500 yuan/kilowatt in 2008 to the current level of 4,600 to 4,800 yuan. The rate of decline is unprecedentedly rapid. Some companies in the sector have already suffered losses.
5. The industry has entered a phase of consolidation and the profitability of high-quality companies is still guaranteed. The market shares of Sinovel, Goldwind and Dongqi, the three leading companies in the wind power complete machinery market, continue to increase, and the gap between them and the second and third tiers is widening bymore and more. Through the liberation of scale effects and the integration of the industrial chain, the profitability of high-quality enterprises in the industry is always guaranteed.
6. The direct drive technology path has been recognized by the market, and the company's market share continues to increase. Direct drive wind turbines are gradually being recognized by wind energy investors for their high power generation efficiency, grid friendliness and low maintenance requirements. With differentiated design, the company has developed a series of models suitable for different environments such as high and low temperatures, high altitudes, low wind speeds and coastal areas, which has improved the competitiveness and power of trading of the company in the market.
7. Export, development of wind energy in Xinjiang and developmentof wind farms have driven continued growth in wind turbine sales. The expansion of the export market and the large-scale development of wind power in Xinjiang will provide the company with new niche markets. Over the next few years, these two markets will become the company's new growth points. In addition to realizing hidden wind turbine sales, the synergistic effects of wind farm development activities can also improve the company's competitiveness and bargaining power.
8. Maintain “Strongly Recommended-A” investment grade for the company. expectedThe company's EPS in 2010 and 2011 was 1.16 yuan and 1.35 yuan. Calculated based on the closing price of 19.03 yuan on June 18, the company's dynamic price-to-earnings ratios were 16.40 times and 14.10 times, respectively.
Although the wind industry faces many problems such as slowgrowth, overcapacity, increased competition, falling prices, etc., we believe that the company's management is forward-looking and has a complete industrial configuration, and can continue to achieve horizontal growth above the sector average. Through economies of scale, design improvement and self-production of spare parts, the impact of falling fan prices on profitability can be absorbed to a certain extent. The company's ability to sustain growth and resist risks is strong, making it the top investment choice in the wind power equipment industry.