Summary of Wind Power Gearbox Conference Call Industry Overview - The wind power gearbox industry is projected to see a demand of slightly over 20,000 units in 2025, with the company aiming for a production target of 3,700 units, potentially reaching 3,800 units [1][3] - Major competitors include South High Gear (approximately 10,000 units), Envision (around 4,000 units), CRRC Qishuyan (1,600-1,800 units), and Southern Aerospace (about 700 units) [1][3] Key Insights and Arguments - **Technological Trends**: The industry is shifting towards medium-speed permanent magnet and front integration technologies, with semi-direct drive systems gaining popularity due to their lightweight advantages [1][8] - **Pricing**: Gearbox prices for the 6-8 MW range are approximately 1.6 to 1.8 million yuan, while 10 MW units range from 1.9 to 2.3 million yuan, influenced by power, design, and configuration [1][7] - **Cost Reduction Strategies**: The company plans to lower costs through material price reductions, competitive bidding, and utilizing off-peak electricity pricing [1][19] - **Future Projections**: The target order volume for 2026 is set between 4,500 and 5,300 units, with a maximum goal of 5,700 units [1][18] Competitor Analysis - **South High Gear**: Experienced a loss last year, with strong R&D capabilities but facing internal issues. They are considered a fierce competitor [1][11] - **Envision**: Primarily self-sufficient but still procured around 50 units from the company last year [1][12] - **Mingyang Smart Energy**: Utilizes gearboxes from South High Gear, the company, and CRRC, with these three suppliers dominating the market [1][13] Market Dynamics - **Offshore vs. Onshore Wind Power**: Offshore wind power gearboxes are priced higher than onshore due to greater strength and operational requirements, with a notable difference in profitability [2][30] - **Export Market**: The export market is slightly more expensive due to a 5% allocation for after-sales service costs, but overall quality differences between domestic and export markets are minimal [2][30] Production and Capacity Plans - The company produced 2,400 units last year and aims for 3,700 units this year, with a projected capacity of 4,500 units by the end of next year [1][14][16] - The factory layout includes three phases, with a focus on optimizing production processes and enhancing capacity [1][17] Customer Feedback and Product Development - Customers have recognized the benefits of sliding bearings, with plans to increase their usage to 30-40% by 2026, primarily with major clients like Goldwind [1][22][24] - The company is also exploring cost-saving measures through standard parts price reductions and optimizing production during off-peak electricity hours [1][27] Future Outlook - The wind power industry is expected to adopt more non-traditional technologies, with a focus on efficiency and cost reduction [1][8] - The domestic bearing technology gap is narrowing, with an anticipated increase in domestic production rates due to cost advantages and government support [2][30][31] Conclusion The wind power gearbox industry is poised for growth, driven by technological advancements, strategic partnerships, and a focus on cost efficiency. The company is well-positioned to capitalize on these trends while navigating competitive pressures and market dynamics.

Core Viewpoint - The company is rated "Buy" with a target price of 42.0 CNY, corresponding to a 23x P/E for 2025, indicating optimism about its growth potential in the wind power bearing market [1] Industry Outlook - The wind power industry is expected to experience structural opportunities during the 14th Five-Year Plan, driven by the acceleration of domestic power marketization and the introduction of policy documents like "Document 136" [2] - The forecast for domestic wind power installations is 110 GW, 130 GW, and 140 GW for 2025, 2026, and 2027 respectively, representing year-on-year growth rates of 26%, 18%, and 8% [2] - The domestic market for bearings in wind turbines is estimated to be around 12 billion CNY, with each turbine requiring bearings valued at approximately 1 million CNY [2] Company Growth Potential - The company is projected to capture over 35% of the market share in the main bearing segment, with a market size of 61.7 billion CNY for pitch and yaw bearings, 17.5 billion CNY for TRB main shaft bearings, and 37.6 billion CNY for gearbox bearings by 2025 [3] - The company anticipates a recovery in gross margins due to the increasing sales of high-margin TRB main shaft bearings, which are expected to return to levels comparable to the 2021 industry cycle by 1H25 [3] - The company aims to achieve a market share of approximately 20% in gearbox bearings as production capacity comes online in 1H25, contributing to its third growth curve [4] Market Positioning - The company holds a competitive advantage in the TRB main shaft bearing segment due to its early entry in technology, capacity preparation, and customer acquisition, with expectations of significant revenue growth in 2025-26 [3] - The company is also positioned to benefit from increased demand for shield tunneling machines driven by downstream hydropower projects, potentially expanding the overall market size by 6-12% [5] Financial Projections - The company's projected net profits for 2025, 2026, and 2027 are 696 million CNY, 842 million CNY, and 1.03 billion CNY, with year-on-year growth rates of 965%, 21%, and 22% respectively [6] - The estimated EPS for the same period is 1.83 CNY, 2.21 CNY, and 2.70 CNY per share [6]