1H22 interim results preview
Xinjiang Goldwind will announce 1H22 interim results on August 19th.
We forecast net profit to shareholders to decline c.4% y-o-y to Rmb1.68bn. This is mostly due to sales of higher margin turbines in 1H21 not recurring in 1H22.
In the core wind turbine generator business (WTG), we forecast revenue to decline 13.5% y-o-y. We forecast sales volume to rise c.25% y-o-y to 3.7GW, roughly in line with China’s wind capacity installation growth YTD. However, 1H21 WTG segment ASP was distorted upward thanks to significant sales of higher priced 6S/8S models. This is not expected to be repeated in 1H22 as Goldwind had no external orders for 6S/8S models as at March-22. The lack of 6S/8S sales should also drive gross margin compression for the WTG segment. We have penciled in gross margin for the WTG segment of 14.8% in 1H22, down c.5ppts from c.19.9% in 1H21.
Key items to look for include the following. First, Goldwind expects to achieve c.14GW of wind turbine sales volume for the full year of FY22. We would look for YTD progress, changes in the volume target, and/or comments for guidance in future years. Second, we would pay attention to the company’s outlook WTG ASP which had come under pressure. Goldwind had previously provided guidance of c.15% for the WTG segment. We would look for changes to the margin target, especially from changes in product mix. Regarding Goldwind’s new MSPM turbine models, we would be interested in further color on ASP and/or margin trends.
We currently rate Goldwind HOLD with H-share/A-share target price of HK$11.7/Rmb14.