1Q22 Briefing takeaways – FY22 guidance largely maintained
Goldwind is maintaining its full year FY22 guidance. The company targets to achieve FY22 WTG sales volume of 16GW. WTG segment gross margin should stay at 15%. Goldwind maintains its c.1.5GW growth target for its wind farm generation capacity in 2022. Goldwind also maintains full year new wind installation of 55-60GW of new wind installations in China, up 15-25% from c.48GW in 2021.
Although major guidance remains unchanged, we see some positive signs. First, we believe gross margin of its new product, MSPM, is improving from around 7% in FY21 to estimated >10% in FY22. The new medium speed permanent magnet (MSPM) product accounts for c.33% of external orders as at Mar-22. Goldwind plans to have MSPM products account for c.50% of WTG sales in the longer term. This should help alleviate part of the margin squeeze from lack of large blade models.
Second, the company noted there are early signs the WTG ASP could be bottoming. Goldwind’s customers are starting to emphasize turbine quality over purely low price. Furthermore, the company also sees early signs of raw material/component costs peaking. Should such trend continues, gross margin of 15% should be achievable in FY22 with slight uptrend in FY23.
Nevertheless, to be conservative, we maintain our earnings forecast with HOLD rating intact. TP of HK$11.7 (H-share) and Rmb14 (A-share) remain unchanged.