Summary of TianShun Wind Power Q3 2025 Earnings Call Company Overview - **Company**: TianShun Wind Power - **Industry**: Wind Energy and Marine Engineering Key Financial Highlights - **Revenue**: - Q3 2025 revenue was 1.53 billion CNY, with a total revenue of 3.72 billion CNY for the first three quarters, representing a year-on-year increase of 4.56% [3][4] - **Net Profit**: - Net profit for Q3 was 15.88 million CNY, while the net profit for the first three quarters was 69.71 million CNY, showing a significant decline of 76.1% year-on-year [3][4] - **Segment Performance**: - Marine Engineering: Revenue of 870 million CNY with a net loss of 14.33 million CNY [3] - Tower and Bucket Segment: Revenue of 1.13 billion CNY with a loss of approximately 30 million CNY [3] - Blade and Mold Segment: Revenue of 590 million CNY with a loss of approximately 92 million CNY [3] - Power Generation: Revenue of 960 million CNY with a net profit of 320 million CNY, achieving a gross margin of 62.6% [6] Operational Insights - **Marine Engineering Losses**: The primary reason for losses in the marine engineering segment was due to receivables impairment, amounting to approximately 12 million CNY, primarily from older projects [5] - **Power Generation Performance**: - Q3 power generation was 690 million kWh, down 15% year-on-year, with revenue decreasing by 22% [6] - The average selling price of electricity slightly increased compared to Q2 [6] Future Outlook - **Project Delivery Expectations**: - The company expects to deliver approximately 50,000 tons of marine projects in Q4, consistent with previous forecasts [7][8] - **Upcoming Projects in Guangdong**: - There are around 15 planned projects in Guangdong over the next three years, with significant confidence in securing a 50% market share [9][10] - **Long-term Projections**: - The peak construction period for projects is anticipated to be in 2027 and 2028, with a gradual increase in project initiation starting from 2026 [11][54] Strategic Adjustments - **Focus Shift to Offshore Wind**: The company is strategically shifting focus from onshore to offshore wind projects, aiming to enhance profitability and reduce reliance on less profitable segments [31][42] - **Blade Production Outlook**: The company is cautious about the blade segment, indicating a potential reduction in production and a shift towards molds and non-wind energy composite products [45][46] Additional Considerations - **Capacity and Infrastructure**: - The company is upgrading its facilities to enhance production capabilities, particularly in the marine engineering sector [17][18] - **Market Dynamics**: The competitive landscape in Guangdong is noted to be intense, with limited production capacity among manufacturers [33] Conclusion - TianShun Wind Power is navigating a challenging financial landscape with strategic shifts towards offshore wind projects and a focus on improving operational efficiency. The company remains optimistic about future project deliveries and market opportunities, particularly in Guangdong, while managing existing operational challenges.

Core Viewpoint - The report from Zheshang Securities indicates that Yaxing Anchor Chain achieved a net profit attributable to shareholders of 211 million yuan in the first three quarters of 2025, representing a year-on-year increase of 9.38% [1] - The company reported a net profit of 96.74 million yuan in Q3, showing a year-on-year growth of 77.72% and a quarter-on-quarter increase of 55.9% [1] - The company is expected to benefit from the upward cycle of the ship oil service industry and the development of floating wind power [1] Market Potential - Over 80% of the world's offshore wind resources are located in deep waters exceeding 60 meters, making floating wind power a significant trend for future offshore wind development [1] - The floating wind power industry is currently in the early stages of commercialization, with expectations to enter a commercial phase by 2030 [1] - According to the Global Wind Energy Council, it is estimated that the global floating wind power installed capacity will add 1.03 GW by 2030, with a CAGR of 70% from 2024 to 2030 [1] - By 2034, the installed capacity is projected to reach 5.724 GW, with a CAGR of 63% from 2024 to 2034 [1] - The estimated market space for mooring chains corresponding to the new installed capacity of floating wind power in 2034 is approximately 14.3 billion yuan [1] Competitive Advantage - The company has won multiple orders for mining chains from major clients such as State Energy and China Shenhua [1] - It is anticipated that the company will leverage its leading technology in ship anchor chains and offshore mooring chains to benefit from the domestic substitution of mining chains [1] - The outlook for the company in the shipbuilding, offshore engineering, floating wind power, and mining chain sectors is positive, maintaining a "buy" rating [1]

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **European wind power market** and the challenges faced by **Chinese wind power companies** entering this market [1][2][3]. Core Insights and Arguments - **Slow Development in Europe**: The European wind power market is experiencing slow growth due to bureaucratic hurdles, aging grid infrastructure, and local protectionism, which hinder project approvals and construction speed [1][2]. - **Auction Mechanism Inefficiency**: The auction mechanism for wind power projects in Europe is inefficient, with varying policies across countries leading to slow project progress. Investors are advised to be cautious about expecting rapid acceleration in project development [4][5]. - **Energy Demand Growth**: Over the next 3-5 years, energy demand in Europe is expected to grow slowly, with infrastructure improvements continuing but at a slower pace compared to the Asia-Pacific region [6]. - **Importance of Energy Storage**: Energy storage systems are crucial for addressing grid bottlenecks. Chinese companies like CATL are actively penetrating the European market with integrated solutions that combine wind turbines and energy storage [7]. - **Chinese Manufacturers' Progress**: Chinese manufacturers, such as Daikin, have made progress in the European market through close cooperation with original equipment manufacturers (OEMs) and cost advantages, although their overall supply chain position remains limited [8][9]. - **Domestic Wind Power Pricing**: Domestic wind power bidding prices have hit a bottom, with some companies facing losses. Prices are expected to stabilize over the next 3-5 years, leading to potential industry consolidation [16]. - **Trend of Larger Turbines**: The trend towards larger wind turbines is essential for maintaining competitiveness. Current domestic onshore turbines are around 6 MW, while offshore turbines range from 10 to 12 MW, compared to international leaders like Vestas, which have 15 MW turbines [17][18]. - **Offshore Wind Power Development**: Domestic offshore wind power is expected to continue growing, driven by limited onshore resources and higher profit margins, although it heavily relies on policy support [19]. - **Floating Wind Technology**: Floating wind technology is anticipated to achieve commercial viability within three years, but high costs related to infrastructure and tower construction remain a barrier [20]. - **Market Dynamics in South America**: The South American wind power market is in a rapid expansion phase, comparable to China's renewable energy market five to eight years ago [23]. Additional Important Insights - **Challenges for Chinese Companies**: Chinese companies face significant challenges in entering the European market due to political factors and local supply chain protections. However, they have made progress in more favorable regions like South America and the Asia-Pacific [12][15]. - **Competitive Advantages of Chinese Firms**: Chinese wind power companies have competitive advantages in pricing (5%-10% lower than international competitors), product performance, and customer service, which are crucial for success in international markets [24]. - **Tight Supply of Installation Vessels**: There is a tight supply of installation vessels for offshore wind projects, which is expected to continue for the next two to three years due to high demand [25]. - **Foreign OEMs' Profitability**: Foreign OEMs profit from after-sales services, providing comprehensive management services that generate stable income over time. Domestic companies need to adapt to this model to meet local customer demands [26].

Core Viewpoint - The company Mingyang Smart Energy plans to invest a total of 14.2 billion yuan (approximately 1.5 billion pounds) in the UK to establish the first integrated wind turbine manufacturing base in Scotland, focusing on offshore and floating wind turbine production [1] Investment Plan - The investment will be executed in three phases: - Phase 1: Construction of advanced wind turbine nacelle and blade manufacturing facilities, with the first batch expected to be operational by the end of 2028 - Phase 2: Expansion of production lines to accelerate the scale production of floating wind technology - Phase 3: Further expansion into the production of control systems, electronic devices, and other key components [1] - Funding sources include the company's own funds, self-raised funds (including funds raised from the issuance of global depositary receipts in 2022), and future bank financing [1] Strategic Importance - The investment aims to introduce advanced offshore wind technology to the North Sea region, facilitating the commercialization of floating wind technology - Establishing a complete production and service system locally will enhance the company's leadership in global offshore wind technology standards and industry upgrades [1] Company Background - Mingyang Smart Energy, founded by Zhang Chuanwei, has evolved from a small workshop into a major player in the wind power industry, achieving rapid growth in production value [2] - The company specializes in the research, production, and management of large wind turbines and their core components, serving major state-owned power generation groups [2] International Expansion - Since its listing in 2019, the company has accelerated its international expansion, opening a commercial and engineering center in Hamburg, Germany, and achieving significant sales orders in Europe and Southeast Asia [3] - The company has also listed its global depositary receipts on the London Stock Exchange, becoming the first Chinese private enterprise to do so under the "China-Europe Link" framework [3] Technological Advantage - Mingyang Smart Energy emphasizes its leading technology in floating wind power, which is more suitable for deep-sea areas and significantly improves wind energy resource utilization [4] - The company has successfully launched the 16.6MW "Mingyang Tiancai" floating wind power platform, showcasing advanced technologies such as high-performance concrete buoys and intelligent sensing systems [4] Financial Challenges - The company faces increasing liquidity pressure, with total assets of 90.82 billion yuan and a debt ratio of 69.9% as of mid-2025 - Cash and cash equivalents stood at 10.58 billion yuan, while short-term and long-term borrowings have significantly increased [5] - The investment plan requires approvals from various regulatory bodies, introducing uncertainties that could impact the project's execution [5] Current Revenue Status - Despite the aggressive international expansion, the company's overseas revenue remains low, accounting for only 2.3% of total wind power product revenue in 2024 [6]

Core Viewpoint - Mingyang Smart Energy plans to invest £1.5 billion (approximately ¥14.21 billion) to establish the UK's first integrated wind turbine manufacturing base in Scotland, aiming to enhance its offshore wind technology and expand its international presence [1][2]. Group 1: Investment and Project Phases - The investment project will be executed in three phases: the first phase involves constructing a wind turbine nacelle and blade manufacturing facility, with the first production expected by the end of 2028 [1]. - The second phase will focus on expanding production lines to accelerate the commercialization of floating wind technology in the UK [1]. - The third phase will extend to the production of control systems, electronic devices, and other critical components [1]. Group 2: Market Potential and Strategic Importance - The investment aligns with the UK’s strategic energy transition, as the government aims to double annual investments in clean energy by 2035, with offshore wind identified as a core industry [1]. - Mingyang Smart Energy's move to international markets is a significant step in its globalization strategy, leveraging the vast potential of overseas markets [1]. Group 3: Technological Advantages and Sales Performance - Mingyang Smart Energy holds a leading position in both onshore and offshore wind sectors, with its MySE series turbines featuring a fully sealed nacelle design and efficient heat exchangers, providing excellent corrosion resistance [2]. - The company has completed a product range layout for turbines up to 25MW, with a product line of 10-25MW capacity turbines and a floating wind turbine innovation system [2]. - In the first half of the year, the company achieved external sales of 8.10GW of wind turbines and secured new orders of 13.39GW, including approximately 1.7GW from overseas [2]. Group 4: Financial Performance - For the first half of the year, Mingyang Smart Energy reported a revenue increase of 45.33% to ¥171.43 billion, while net profit attributable to shareholders decreased by 7.68% to ¥6.10 billion [2]. - The decline in net profit is attributed to the delivery of lower-priced orders and a decrease in grid-connected electricity prices due to the entry of new energy sources [2]. - Domestic revenue accounted for ¥167.76 billion (97.86% of total revenue) with a gross margin of 12.11%, while overseas revenue was ¥3.67 billion with a gross margin of 12.37% [2].

Core Viewpoint - Mingyang Smart Energy plans to establish the UK's first integrated wind turbine manufacturing base in Scotland, with a total investment of £1.5 billion (approximately ¥14.21 billion) aimed at producing offshore and floating wind turbines [1][2]. Group 1: Investment and Strategic Goals - The investment will help the company create an offshore wind power center serving the UK, Europe, and other non-Asian markets, positioning it as a significant player in the global offshore wind industry [2]. - The company is shifting its global strategy from traditional "going out" and product export models to a focus on "localized operations," utilizing local talent and supply chains to meet local market demands [2]. Group 2: Project Phases and Market Opportunities - The project will be developed in three phases: the first phase involves building advanced wind turbine nacelle and blade manufacturing facilities, expected to commence production by the end of 2028; the second phase will expand production lines for floating wind technology; and the third phase will include the production of control systems and other key components [4]. - The UK government’s "2030 Clean Power Action Plan" aims for an offshore wind capacity of 43-50 GW by 2030, presenting significant market opportunities for the company [4]. Group 3: Funding and Partnerships - Funding for the project will come from the company's own resources and self-raised funds, including proceeds from the issuance of global depositary receipts in 2022 and future bank financing [5]. - The company has engaged in detailed discussions with the UK and Scottish governments, as well as various financial institutions, to facilitate the investment plan [5]. Group 4: Technological Advantages and Market Trends - Mingyang Smart Energy has a strong technological advantage in floating wind power, evidenced by the successful operation of the world's largest floating wind platform, "Mingyang Tiancheng," which has a total capacity of 16.6 MW [8]. - Analysts predict a significant increase in demand for offshore wind power in Europe over the next decade, driven by energy transition and independence goals, with the European offshore wind market expected to see cumulative new installations of 126 GW from 2025 to 2034 [10][11].

Core Viewpoint - Mingyang Smart Energy plans to invest £1.5 billion (approximately ¥142.1 billion) to establish the UK's first integrated wind turbine manufacturing base in Scotland, marking its first overseas investment exceeding ¥10 billion since its listing in 2019 [2][5]. Investment Details - The investment will be executed in three phases: 1. The first phase involves constructing advanced manufacturing facilities for wind turbine nacelles and blades, with the first batch expected to be operational by the end of 2028 [5]. 2. The second phase will expand production lines to accelerate the scale production of floating wind technology in the UK [5]. 3. The third phase will further extend to the production of control systems, electronic devices, and other key components [5]. Strategic Importance - This investment aims to introduce the company's offshore wind technology to the North Sea region, facilitating the commercialization of floating wind technology, which supports the UK's clean energy transition goals and aligns with global carbon neutrality trends [7][8]. - The project is expected to establish a complete production and service system in the UK, enhancing the company's position in global offshore wind technology standards and industry upgrades [8]. Market Context - The global energy transition and renewable energy development context is driving Chinese wind power companies to pursue international strategies, including establishing overseas production bases and collaborating with international partners [9]. - Major energy-consuming regions, particularly in developed countries, are implementing new plans to increase renewable energy projects, simplifying approval processes, and providing various subsidies, creating new growth opportunities for the wind energy sector [9]. Financial Performance - In the first half of 2025, the company reported a 45.33% year-on-year increase in revenue to ¥171.43 billion, while net profit attributable to shareholders decreased by 7.68% to ¥6.10 billion [10][11].

Investment Rating - The report assigns a "Buy" rating to the company, marking its first coverage [6]. Core Insights - The company is a global leader in the anchor chain industry, with significant growth potential driven by the floating wind power sector [5][4]. - The company has a strong market position, benefiting from the increasing demand in shipbuilding and offshore platform investments [5][2]. - The company has shown impressive order growth, with a 68.1% increase in new orders for mooring chains in the first half of 2025 compared to the entire year of 2024 [3]. Company Overview - Jiangsu Yaxing Anchor Chain Co., Ltd. was established in 1981 and has developed into a leading manufacturer of ship chains and mooring chains, with a revenue composition of 71.6% from ship chains and 27.0% from mooring chains as of 2024 [1][26]. - The company has a production capacity of 350,000 tons, including 160,000 tons of ship chains and 110,000 tons of offshore platform mooring chains [26]. Industry Trends - The global shipbuilding industry is experiencing a growth cycle, with new ship orders increasing by 58.8% in 2024, and China's share of new orders rising to 66.9% [2][48]. - Offshore oil and gas exploration investments are projected to continue growing, with an expected investment of $220 billion in 2025, reflecting a 5.0% year-on-year increase [3]. - The floating wind power market is anticipated to see explosive growth, with a projected compound annual growth rate of 54.9% from 2024 to 2029 [4]. Financial Projections - The company is expected to achieve revenues of 2.25 billion, 2.61 billion, and 3.03 billion yuan from 2025 to 2027, with year-on-year growth rates of 13.3%, 15.7%, and 16.4% respectively [5][10]. - The net profit attributable to shareholders is projected to grow from 342 million yuan in 2025 to 488 million yuan in 2027, with growth rates of 21.1%, 19.9%, and 19.2% [5][10].

Core Viewpoint - The report from Zheshang Securities highlights that Yaxing Anchor Chain is a core supporting enterprise in "deep-sea technology," benefiting from the rising demand in the shipping and offshore oil and gas sectors, as well as the growth potential in floating wind power [1] Group 1: Project Overview - Currently, there are five connected floating offshore wind power projects, including the Three Gorges Leading No. 1, China Shipbuilding Fuyun No. 1, CNOOC Guanquan No. 1, State Power Sharing No. 1, and Mingyang Tiancai No. 1, all of which are demonstration projects [1] - Three actively promoted domestic projects include the Hainan Wanning commercial project (100MW), CNOOC Lufeng Oilfield Group clean energy power supply transformation demonstration project (16MW), and the Three Gorges 16MW floating offshore wind power project [1] Group 2: Market Potential - According to the Global Wind Energy Council, it is estimated that by 2030, the global installed capacity of floating wind power will increase by 1.03GW, with a CAGR of 70% from 2024 to 2030; by 2034, the new installed capacity will reach 5.724GW, with a CAGR of 63% from 2024 to 2034 [1] - The estimated market space for new mooring chains corresponding to the new installed capacity of floating wind power in 2034 is approximately 14.3 billion [1] Group 3: Company Outlook - Previously, the company's performance was mainly reliant on the contributions from ship anchor chains and offshore oil service mooring chains, which had limited market space; however, with the active expansion into the floating wind power sector and product matrix, the market space has opened up [1] - The company is positioned as a key player in the shipping sector and is recognized as a strong alpha logic stock among wind power component companies, with positive prospects in shipping, offshore engineering, and floating wind power [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [8] Core Views - The company is positioned as a core component supplier in "Deep Sea Technology," benefiting from the upturn in the shipbuilding and offshore oil and gas sectors, while floating wind power presents significant growth opportunities [1][2] - The floating wind power market is expected to enter a commercialization phase by 2030, with a projected compound annual growth rate (CAGR) of 70% from 2024 to 2030, and an estimated market space of approximately 14.3 billion in 2034 [2][3] - The offshore oil service sector has seen a significant increase in new orders, with approximately 39,500 tons of new orders in the first half of 2025, indicating a high order volume and favorable market conditions [3] - The shipbuilding industry is entering a mid-cycle upturn, driven by a combination of replacement cycles and environmental regulations, leading to increased demand for ship anchor chains [3] Summary by Sections Market Expectations - The floating wind power market's commercialization timeline remains uncertain, while the price elasticity of ship anchor chains is relatively low compared to new ship prices [2] Project Insights - Currently, there are five operational floating offshore wind projects, with three more in progress in China, indicating a growing interest in this sector [2] - The global floating wind power market is projected to add 1.03 GW of new installed capacity by 2030, with significant growth expected through 2034 [2] Financial Projections - The company is expected to achieve net profits of approximately 317 million, 399 million, and 485 million from 2025 to 2027, reflecting year-on-year growth rates of 13%, 26%, and 22% respectively, with a CAGR of 20% [6][13] - The price-to-earnings (P/E) ratio is projected to be 30, 23, and 19 times for the years 2025, 2026, and 2027 respectively [6][13] Unique Insights - The report highlights a shift in market perception regarding the company's revenue sources, now recognizing the potential of floating wind power alongside traditional ship and offshore oil service chains [5] - The company is positioned as a key player in the shipbuilding sector and a strong candidate in the wind power components market, suggesting a robust investment opportunity [5]