1H21 results beat on improved turbine margin

After market close on 22-Aug, Goldwind reported a 1H21 net profit of Rmb1.7bn, +51% YoY and likely ahead of market expectations. Turbine gross margin improved meaningfully to 20% in 1H21 (vs 12% in 1H20), ahead of earlier full-year guidance of 18%.

Total wind turbines sales volume (3.0GW) dropped 28% YoY in 1H21, as onshore wind rush installation ended last year. However, product mix improved as volume from large-size turbines (6-8MW) picked up strongly (40% turbine revenue contribution in 1H21), likely helped by offshore wind rush installation this year. Gross margin was also higher on large-size units (26% GPM).

Quarterly industry turbine tender volume increased further to 17.2GW in 2Q21 from 14.2GW in 1Q21, leading to a total tender volume of 31.5GW in 1H21, up 168% YoY and close to historical high. Turbine tender price dropped to Rmb2,473-2,616/kW by June-2021.

We maintain Outperform rating for Goldwind. At the company’s conference call on 23-Aug, we expect the key focus to be turbine volume, cost and gross margin guidance for 2H21 and FY22.