Summary of Offshore Wind Power Industry and Submarine Cable Companies Industry Overview - The domestic offshore wind power market is expected to exceed 10 GW in bidding volume for 2025, but actual progress is lower than anticipated due to the cancellation of national subsidies and reduced local subsidies, leading to insufficient motivation for operators to rush installations [1][2][3] - Military factors significantly impact the development of offshore wind power, with projects in Zhejiang, Fujian, and Hainan facing obstacles, while Liaoning province performs better than expected and Guangdong remains a major contributor [1][3][6] - The offshore wind power gross margin is higher than that of onshore wind power, but market pricing and price reduction pressures may lead to a decline in gross margins, necessitating efficiency improvements and cost reductions by companies [1][15] Key Insights - The expected development of offshore wind power in 2026 is anticipated to be better than during the 14th Five-Year Plan, contingent on resolving military issues in affected provinces [1][4] - The domestic supply chain faces challenges, particularly in construction resources and key equipment capacity, which are bottlenecks that hinder the achievement of the annual target of 20 GW [1][11][12] - The demand for 500 kV AC or DC products is increasing, with leading companies maintaining a gross margin of around 50% due to stable competition [1][19][20] Regional Performance - In 2025, the overall progress of offshore wind power projects has increased compared to 2024, but still falls short of expectations. Notable performances include: - Liaoning province shows rapid development with project bidding expected to commence in 2026 [3][9] - Guangdong province has around 4 GW in bidding volume, maintaining its status as a key contributor [3][9] - Fujian province's projects are largely paused, with minimal progress expected in the short term [8][9] Future Projections - The 14th Five-Year Plan's uncompleted offshore wind power projects will carry over to the 15th Five-Year Plan, with expectations of at least 10 GW achievable annually, contingent on new supportive policies [10][11] - The domestic market's absorption capacity is primarily local, with future trends indicating a shift towards market pricing and gradual price reductions [14] International Market Opportunities - Domestic submarine cable companies, such as Dongfang Cable and Zhongtian Technology, are performing well in the European market, which has seen a significant increase in bidding volume since 2023 [22][23] - The European market presents substantial opportunities for domestic companies, although challenges exist regarding legal, operational, and performance aspects [22][26] - The demand for high-voltage products in Europe remains dominated by local companies, but the potential for domestic companies to capture market share is significant due to local production capacity shortages [28][29] Competitive Landscape - The domestic submarine cable industry is experiencing intensified competition, particularly for high-end products like 500 kV cables, where leading companies face fewer challenges compared to smaller firms [24][25] - The gross margin for similar products sold in Europe is approximately 5% higher than in China, driven by the need for domestic companies to establish their reputation in international markets [29] Conclusion - The offshore wind power industry in China is at a critical juncture, with military and regulatory challenges impacting growth. However, the potential for expansion in both domestic and international markets remains strong, particularly in Europe, where demand is high and local production capacity is insufficient. Companies must navigate these challenges while focusing on efficiency and cost management to maintain competitiveness in a rapidly evolving landscape [1][23][24]