Summary of Key Points from the Conference Call Industry Overview - **Industry**: China's Wind Power Sector - **Current Status**: The sector has turned a corner after years of price competition, with a recovery in wind turbine prices observed year-to-date [3][6][14]. Core Insights - **Demand Resilience**: Demand for wind power is expected to remain strong through 2026-27, driven by: - Healthy growth in wind power tender volumes, which increased by 9% year-on-year to 72GW in the first half of 2025 [6][14]. - Favorable project internal rates of return (IRRs) with less impact from new electricity tariff policies, as evidenced by a bidding result of CNY0.319/kWh for wind power in Shandong Province [6][14]. - Anticipated acceleration in offshore wind installations due to supportive policies under China's 15th Five-Year Plan [6][14]. - **Installation Forecasts**: - Forecasted growth of 29% year-on-year in wind installations to 112GW in 2025, with 100GW for onshore (+23% year-on-year) and 12GW for offshore (+117%) [6][14]. - Expected annual demand of 107GW/108GW for 2026/27, primarily driven by robust offshore wind demand [6][14]. - **Market Dynamics**: - Reduced market competition is anticipated to lead to better turbine margins, supported by easing price competition and improved sales mix [7][22]. - The average bidding price for wind turbines in China has rebounded by 10% year-on-year to CNY1.6/W as of June 2025 [7][22]. Company-Specific Insights - **Ningbo Orient Wires & Cables (NBO)**: - Initiated coverage with a Buy rating, expecting a 40% earnings CAGR from 2024-27, driven by offshore wind project construction and high-end cable product penetration [4][10][37]. - Target price set at CNY83, based on a 26x FY26 EPS of CNY3.20, indicating a 19% upside [10][110]. - **Goldwind**: - Also initiated coverage with a Buy rating, forecasting a 41% earnings CAGR from 2024-27, supported by margin improvement and higher contributions from offshore and overseas projects [4][10][38]. - Target price set at HKD18, based on a 17x FY26 EPS of CNY0.97 [10][38]. Emerging Growth Drivers - **Offshore Wind Sector**: Expected to see accelerated demand growth from 2026-30, supported by local consumption and policy backing [8][84]. - **Overseas Demand**: Export sales are emerging as a growth driver, with a projected CAGR of 15% for onshore wind installations outside China from 2025-30 [9][30]. Investment Risks and Catalysts - **Risks**: - Lower-than-expected wind power demand due to policy headwinds or intensified price competition [11][46]. - Longer-than-expected project approval and construction periods [11][46]. - **Catalysts**: - New project tenders and supportive policies expected to boost visibility for demand in 2026-27 [11][46]. Additional Insights - **Market Share**: The wind turbine market in China is highly concentrated, with the top ten players accounting for 99% of new installations in 2024 [72]. - **Export Growth**: Wind turbine exports from China grew 40% year-on-year to 5.2GW in 2024, indicating strong international demand [30][77]. This summary encapsulates the key points from the conference call, highlighting the current state and future outlook of China's wind power sector, along with specific insights into the companies NBO and Goldwind.

Industry News - One of Japan's leading regions for offshore wind power is urging authorities to reissue a tender for two critical projects [1] Project Updates - Mitsubishi withdrew from the planned offshore wind power developments [1]

Core Viewpoint - Orsted plans to cut up to 2,000 jobs by the end of 2027 to enhance competitiveness and refocus on the European market [1] Group 1: Company Strategy - The job cuts are part of Orsted's strategy to become more competitive in the wind power sector [1] - The company aims to refocus its efforts primarily on Europe, indicating a shift in operational priorities [1] Group 2: Market Context - Orsted has faced challenges this year due to regulatory actions from the Trump administration that have impacted wind power generation in the United States [2] - Despite these challenges, Orsted's shares saw a 1% increase in early European trading on the announcement day [2]

Skyborn Renewables, a unit of Blackrock's Global Infrastructure Partners, is looking to sell a stake in a major wind farm under development off Germany https://t.co/VUf42V0U2a ...

Market Performance - The three major A-share indices collectively rose, with the Shanghai Composite Index increasing by 1.32%, the Shenzhen Component Index by 1.47%, and the ChiNext Index by 0.73%, while the Northbound 50 Index fell by 0.18% [1] - The total trading volume in the Shanghai and Shenzhen markets reached 26,718 billion yuan, an increase of 4,746 billion yuan compared to the previous day [1] - Over 3,100 stocks in the market experienced gains [1] Sector Performance - The sectors with the highest gains included precious metals, controllable nuclear fusion, rare earth permanent magnets, energy metals, wind power equipment, steel, and storage chips [1] - Conversely, the sectors that saw the largest declines were film and television, tourism and hotels, liquor, and duty-free shops [1] Notable Stocks - The surge in international gold prices led to a collective explosion in the non-ferrous and precious metals sectors, with stocks such as Xingye Silver Tin, Yunnan Copper, Shandong Gold, Sichuan Gold, and Zhaojin Gold hitting the daily limit [1] - The controllable nuclear fusion sector also performed strongly, with stocks like Western Superconducting, Guoguang Electric, and Haheng Huaton reaching the daily limit [1] - The rare earth permanent magnet sector saw a rebound in the afternoon, with stocks such as Northern Rare Earth, China Rare Earth, and China Ruilin hitting the daily limit [1] - Other sectors like storage chips, wind power equipment, and steel also showed performance during the trading session [1] Declining Stocks - The film and television sector experienced significant declines, with stocks such as Bona Film, Hengdian Film, and China Film hitting the daily limit down [1] - The tourism and hotel sector also performed poorly, with stocks like Caesar Travel, Tianfu Cultural Tourism, and Xiyu Tourism showing the largest declines [1]

Orsted A/S raised 60 billion Danish kroner ($9.4 billion) through a rights offering that’s critical for the company to tackle the downturn facing the wind power industry https://t.co/9sMjDk8P2Q ...

Renewable Energy Policy - Japan has indefinitely delayed an auction for offshore wind project funding [1] - The delay is pending a review of the investment climate [1] Industry Impact - This delay represents a setback to Japan's renewable energy expansion efforts [1]

Core Insights - Investors may overlook growth-oriented, profitable companies generating free cash flow (FCF) due to home country bias, but can benefit from international exposure through the VictoryShares International Free Cash Flow Growth ETF (GRIN) [1] Group 1: ETF Overview - GRIN tracks the Victory International Free Cash Flow Growth Index, targeting high-growth, international large-cap companies with potential for compounding FCF generation over time [2] - The Index uses FCF as a forward-looking measure, filtering companies based on FCF trends, FCF to return on invested capital, and growth prospects [2] Group 2: Importance of FCF - FCF is a key metric for assessing sustainable growth companies, indicating their ability to reinvest, offer dividends, or buy back stock, all contributing to shareholder value [3] - GRIN's indexed approach focuses on international companies exhibiting these characteristics, helping diversify portfolios concentrated in U.S. equities [3] Group 3: Notable Holdings - Rolls-Royce Holdings, a British aerospace and defense company, is a top holding in GRIN with a 3.88% allocation, potentially benefiting from increased military spending in the EU [4] - Siemens Energy, a German company, is experiencing record orders due to power demands from AI applications, crucial for Europe's power grid [5] - Siemens is also a leading wind power company, contrasting with the U.S. political agenda, highlighting missed opportunities for investors with a home country bias [6] - Sea Limited, based in Singapore, has seen a nearly 70% increase in value for the year as of 8/31/2025, capitalizing on e-commerce strength in Southeast Asia [7] Group 4: Diversification Strategies - For global diversification, investors can pair GRIN with other VictoryShares ETFs, such as the value-oriented VictoryShares Free Cash Flow ETF (VFLO), which focuses on high-quality, large-cap U.S. stocks [8] - The VictoryShares Free Cash Flow Growth ETF (GFLW) provides exposure to U.S. companies with high FCF profitability and growth potential [9]

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: The conference call primarily discusses the renewable energy sector in China, particularly in relation to the country's climate pledges and decarbonization efforts [2][4]. Core Insights and Arguments - **2035 Climate Pledges**: China's new climate targets for 2035 include: - A reduction of economy-wide net greenhouse gas emissions by 7% to 10% from peak levels [4][4]. - Increasing the share of non-fossil fuels in total energy consumption to over 30% from the current 19.7% [4][4]. - Expanding installed capacity of wind and solar power to over 3,600 GW, which is more than six times the 2020 levels [4][4]. - Scaling up total forest stock volume to over 24 billion cubic meters, surpassing the current level of 20 billion cubic meters [4][4]. - Making new energy vehicles (NEVs) mainstream, with NEVs accounting for 44.97% of all new automobile registrations in H1 2025 [4][4]. - Expanding the National Carbon Emissions Trading Market to cover major high-emission sectors [4][4]. - **Decarbonization Momentum**: The momentum for decarbonization remains strong, supported by anti-involution reforms, expansion of emissions trading systems (ETS), and green finance flows [8][8]. - **Investment Opportunities**: Key investment opportunities highlighted include companies such as Sinoma S&T, ZTT, CATL, XPeng, Li Auto, and Geely, which are positioned to benefit from the climate adaptation and resilience theme [8][8]. Additional Important Insights - **Wind and Solar Capacity**: The target for wind and solar capacity indicates an additional installation of 1,787 GW by 2035, with annual installations expected to average 179 GW from 2026 to 2035 [9][9]. - **Energy Storage Goals**: China has set a goal for energy storage systems (ESS) deployment of 180 GW cumulative capacity by 2027, implying an annual power capacity of approximately 35 GW during 2025-2027 [10][10]. - **Automotive Sector Trends**: Competition in the automotive sector is easing, with narrower discounts and more disciplined pricing strategies. However, sales and profitability pressures are expected to persist until market consolidation occurs [11][11]. - **Climate Adaptation Investments**: Climate adaptation is emerging as a core theme, with investments in technologies and infrastructure to withstand extreme weather conditions. Solutions mapped include climate monitoring systems, cooling technologies, resilient infrastructure, and water solutions [12][12]. - **Wind vs. Solar Installations**: Analysts expect new wind power installations to outpace solar due to better return profiles and robust demand from energy storage and power grid needs [13][13]. This summary encapsulates the key points discussed in the conference call, focusing on China's climate initiatives, investment opportunities, and sector-specific insights.

Summary of the Conference Call on China's Wind Power Industry Industry Overview - The conference call focuses on the **wind power industry in China**, highlighting a significant turnaround after a down-cycle from 2022 to 2024, attributed to self-regulation and robust demand [3][12][39]. Key Points Demand and Installation Forecasts - **Domestic demand** is expected to remain resilient during the 15th Five-Year Plan (FYP), with forecasts of annual installations of **106GW for 2025**, **103GW for 2026**, and **105GW for 2027**, potentially reaching **~120GW per annum from 2028 to 2030**, including **15-20GW offshore annually** [4][12][45]. - Public tendering for wind projects was robust, with **21.5GW tendered** from June to August 2025, marking a **21% year-on-year increase** [13][45]. Industry Dynamics - The industry has achieved a **price and profitability turnaround** without significant government intervention, driven by: 1. **Increased demand** for wind installations, with a **79% year-on-year rise** in new installations in the first seven months of 2025 [40]. 2. **Recovery in bidding prices** for Wind Turbine Generators (WTG), with onshore prices rising **8%** and offshore prices **12%** in 2025 [52]. 3. **Supply chain consolidation** and improved quality focus among manufacturers due to past losses and accidents [15][41]. Investment Preferences - Preference for **key WTG component suppliers** and **submarine cable manufacturers** over WTG Original Equipment Manufacturers (OEMs) due to better margin recovery prospects [5][14]. - **ZTT** is highlighted as a preferred investment due to its strong valuation and expected growth in submarine cable deliveries [20]. Company-Specific Insights - **Sinoma S&T** upgraded to Overweight (OW) with a price target of **Rmb48.2**, reflecting a **98.9% increase in net profit estimates for 2025** and **117.1% for 2026** due to recovery in gross profit margins across its business segments [19][21]. - **Ningbo Orient** remains OW despite a **39.4% reduction in net profit estimates for 2025**, with a price target of **Rmb69.63** [22][23]. - **Riyue** and **Goldwind** are maintained at Equal Weight (EW) with adjusted price targets reflecting lower profit forecasts due to rising costs and reduced sales expectations [24][25][29]. Risks and Challenges - Potential risks include **delays in offshore project approvals**, **competition affecting offshore WTG prices**, and **increased costs for outsourced machining** [16][24][29][37]. - The industry faces challenges from **overseas shipment growth slowing down** and **delayed revenue recognition** for key offshore projects [30][32]. Conclusion - The wind power industry in China is positioned for a strong recovery, driven by robust demand and improved pricing dynamics. Key players in the supply chain are expected to benefit from ongoing margin recovery and favorable market conditions, making them attractive investment opportunities in the near term [42][43].