1QFY22 results: wind turbine operation largely in line with expectation
– 1Q22 net profit up 15% on significant disposal gain
– Wind turbine operation declined 42% in 1Q22 on margin squeeze
– sales volume decline 30% due to lack of large blade models
– Current rating is HOLD with TP of HK$11.7 (H share) and Rmb14 (A share)
Xinjiang Goldwind’s 1Q22 net profit rose 15% to Rmb1.265bn thanks to 131% higher investment income. This was mainly due to an increase in gain on disposal of investment in subsidiaries.
Stripping out the disposal gain and other non-recurrent items, 1Q22 pretax profit would have declined by 42% y-o-y due to lower revenue and gross margin compression. The results were largely inline with expectation.
Revenue fell 8% to Rmb6.383bn. The decline occurred despite wind turbine (WTG) sales volume rising 30% y-o-y to 1.41GW. This was due mainly to the lack of sales of larger blade 6S/8S models which had higher lump sum prices.
Gross profit fell 18% to Rmb1.692bn due to gross margin compressing 3ppts to 27%.
We currently rate HOLD on Goldwind with TP of HK$11.7 (H-share) and Rmb14 (A-share).