Summary of Jinlei Co., Ltd. Conference Call Company Overview - Jinlei Co., Ltd. specializes in the research, production, and sales of wind power main shafts and other large castings and forgings, including forged main shafts, cast main shafts, and bearing seats for wind power products, as well as precision shafts for the shipping and mining machinery industries [3][29]. Key Financial Highlights - For the first three quarters of 2025, Jinlei reported revenue of 2.119 billion yuan, a year-on-year increase of 61.35% [2][3]. - The net profit attributable to shareholders reached 305 million yuan, up 104.59% year-on-year, driven by increased wind power installations and growth in other industries [2][3]. - In Q3 2025, revenue was 836 million yuan, a 39.36% increase year-on-year, with net profit of 117 million yuan, reflecting a 56.5% year-on-year growth [3]. Product Sales and Future Trends - In Q3 2025, the sales volume of casting main shafts was approximately 30,000 tons, with forged main shafts also close to 30,000 tons, totaling 60,000 tons for all shaft products [4]. - The company anticipates a significant increase in industrial products, particularly other precision shafts, in Q4 2025 due to rising demand [5]. - The expected casting output for 2026 is between 130,000 to 140,000 tons, with wind power forging output projected to exceed 110,000 tons [4][10]. Market Outlook - The recent International Wind Energy Conference indicated positive signals for the wind power market in 2026, with customers optimistic about future demand and intent on securing production capacity [6]. - Jinlei is negotiating with overseas clients, maintaining stable pricing while actively developing new products [2][18]. Operational Insights - The operating cash flow in Q3 2025 showed a significant outflow due to increased sales requiring ongoing investment, raw material reserves, and the need for component procurement for assembly [7]. - The Dongying Jinlei Heavy Equipment Factory reported a net profit increase of over 200% in Q3 compared to Q2, marking a significant turnaround [8]. Production Capacity and R&D - The company’s gearbox bearing business has entered the second phase of trial production, with plans to complete sample deliveries by the end of the year and achieve 50% capacity utilization by the second half of next year [9]. - Jinlei is increasing R&D investments, particularly in the application of PEEK materials in wind power main shaft bearings [2][28]. Cost and Pricing Strategy - Raw material prices have been low since March 2025, and while future price trends are uncertain, the company is focusing on cost reduction through process optimization and efficient resource planning [19]. - The company maintains an optimistic outlook on pricing due to limited changes in supply despite rising costs from raw materials [10]. Future Business Directions - Jinlei plans to continue focusing on its core business in the main shaft sector while expanding casting capacity and pursuing differentiated strategies [29]. - The company is also exploring opportunities in the shipping, cement, mining, and hydropower sectors, establishing deep collaborations with state-owned enterprises in the shipping industry [29]. Conclusion - Jinlei Co., Ltd. is positioned for growth in the wind power sector, with strong financial performance, optimistic market outlook, and strategic investments in production capacity and R&D. The company is well-prepared to meet increasing demand and capitalize on emerging opportunities in both domestic and international markets [2][6][29].

Group 1: Production Capacity and Utilization - The company has a casting capacity of 150,000 tons, but can currently release 80,000 to 100,000 tons due to various factors affecting production [1] - The effective casting capacity is expected to double this year, achieving 80,000 to 100,000 tons compared to 30,000 to 40,000 tons in 2024 [2] - The production release rate for new projects is approximately 50%-60% in the first year and 70%-80% in the second year [2] Group 2: Market Trends and Demand - The global offshore wind power installed capacity is projected to grow from 8 GW in 2024 to 16 GW in 2025, representing a 100% increase [1] - The company is diversifying its product offerings in the wind power sector, including both forged and cast components [3] - The market for casting products is expected to stabilize due to a self-regulatory agreement among wind power companies to reduce price competition [3] Group 3: Financial Performance and Orders - The company’s overseas orders have remained stable compared to last year, with an increase in offshore casting orders [4] - The company has invested in a subsidiary for bearing production, with expected product output by the end of 2025 [4] - The company’s market share in the casting spindle sector is increasing due to the rapid development of offshore wind power [5]

Core Viewpoint - The company experienced a decline in net profit in 2024, primarily due to pressure on wind power spindle revenue, while precision shaft products showed rapid growth [1][4]. Group 1: Financial Performance - In 2024, the company achieved operating revenue of 1.967 billion yuan, a year-on-year increase of 1.11%, and a net profit attributable to shareholders of 173 million yuan, a year-on-year decrease of 58.03% [1]. - The revenue from wind power spindle products was 1.388 billion yuan, while other precision shaft products generated 376 million yuan [1]. - In Q4 2024, the company reported operating revenue of 654 million yuan, a year-on-year increase of 7.30% and a quarter-on-quarter increase of 8.99%, with a net profit of 24 million yuan, down 72.05% year-on-year and 68.40% quarter-on-quarter [1]. Group 2: Casting Business - The company has significantly enhanced its production capacity for large wind turbine core casting components, including spindles and hubs, with a sales revenue of 277 million yuan in 2024, representing a year-on-year growth of 71% [2]. - The delivery volume of casting products, including spindles and bearing seats, increased by 120% year-on-year [2]. - The company is expected to benefit from strong demand for offshore wind power in 2025, leading to a potential reversal in profitability for large castings [2]. Group 3: Forging Business - The company has established itself as a global leader in wind power forged spindles, achieving strong profitability through high product quality and cost advantages [3]. - The company covers a range of forged spindle models from 1.5MW to 9.5MW and is poised for growth due to significant increases in land wind power bidding in 2024 [3]. - Revenue from other precision shaft products reached 376 million yuan in 2024, reflecting a year-on-year increase of 29.46% [4]. Group 4: Profit Forecast and Valuation - The company is recognized as a global leader in wind power spindles, with accelerated expansion in casting capacity [5]. - The profit forecast has been adjusted downward, with expected net profits for 2025-2027 at 455 million, 548 million, and 676 million yuan, respectively [5]. - Corresponding EPS for these years is projected to be 1.42, 1.71, and 2.11 yuan per share, with PE ratios of 15, 13, and 10 times [5].

Core Viewpoint - Jinlei Co., Ltd. reported a total operating revenue of 1.967 billion yuan for 2024, a year-on-year increase of 1.11%, but the net profit attributable to shareholders decreased by 58.03% to 173 million yuan, indicating overall performance pressure. The company anticipates a significant rebound in Q1 2025 with a projected net profit of 50-56 million yuan, representing a year-on-year increase of 70.96% to 91.47% [1][2]. Group 1: Financial Performance - In 2024, the company's gross and net profit margins were 21.33% and 8.78%, respectively, down by 11.71 percentage points and 12.38 percentage points year-on-year, with gross margin decline primarily due to intensified price competition in wind power castings and high depreciation and labor costs [1]. - The company expects a strong recovery in Q1 2025, driven by a significant increase in the wind power installation scale, with forecasts of 105-115 GW for 2025, representing a growth rate of 63.9% to 145.9% [1][2]. Group 2: Market Dynamics - The average bidding price for domestic wind turbines hit a low of 1400 yuan/kW in August 2024 but rebounded to stabilize between 1520 and 1540 yuan/kW from August to December, benefiting the company's casting product prices and overall profitability [2]. - The company is positioned as a leading manufacturer of wind turbine forgings, with a comprehensive product range and increasing market share, while also expanding its casting capabilities to meet the growing demand in offshore wind projects [2]. Group 3: Employee Incentives - The company announced a 2025 employee stock ownership plan involving a maximum of 2.8005 million shares, representing 0.88% of total equity, aimed at enhancing operational vitality and reflecting confidence in future growth [3]. Group 4: Future Projections - Revenue projections for 2025-2027 are 2.37 billion, 2.82 billion, and 3.51 billion yuan, with year-on-year growth rates of 20.4%, 19.1%, and 24.5%, respectively. Net profits are expected to reach 340 million, 440 million, and 570 million yuan, with growth rates of 96.2%, 30.2%, and 29.5% [4].