China Wind Equipment_ Offshore wind enters a new era from 2025 and 15th FYP

Summary of Key Points from the Conference Call Industry Overview - Industry: Wind Power in China - Key Focus: Offshore and onshore wind installations, market dynamics, and stock performance of related companies Core Insights and Arguments 1. Offshore Wind Installation Growth: - Expected acceleration of offshore wind installations to 16GW in 2025, 20GW in 2026, and 22GW in 2027, supported by faster approval processes since Q4 2024 [1][3][30] - Total planned capacity of offshore wind projects in China's exclusive economic zone is 230GW, with only 41GW operational by the end of 2024 [3][32] 2. Onshore Wind Installation Forecasts: - New installation forecasts raised to 116GW in 2025 and 130GW in 2026, driven by attractive project returns and replacement demand [2][26] - Onshore installations recorded 75.31GW in 2024, up from 69.07GW in 2023 [26] 3. Market Dynamics: - The market sentiment has been positive, with stock prices of wind equipment companies rising between 18.8% and 151.3% from September to November 2024 [11] - Concerns arose in December 2024 due to operational delays and profit-taking, leading to weaker stock performance [11] 4. Component Suppliers' Advantage: - Component suppliers are expected to benefit from the rapid growth in wind turbine sizes, with ≥8MW models comprising over 35% of public tenders in 2024 [4][19] - The procurement of high-quality large-sized components may become a bottleneck, enhancing suppliers' bargaining power [4] 5. Regulatory Environment: - Anticipation of new regulations for deep-and-distant sea offshore wind projects in 2025, which could standardize and facilitate development [3][12] - Limited impact from renewable energy tariff reforms on offshore wind development due to separate categorization from onshore projects [3][17] Stock Recommendations 1. Overweight (OW) Ratings: - Ningbo Orient (603606.SS) and ZTT (600522.SS) are favored due to their roles in subsea cable supply and offshore development acceleration [5][18] - Jinlei (300443.SZ) and Riyue (603218.SS) upgraded to OW based on potential price increases for casting parts [5][19] 2. Equal-weight (EW) Ratings: - Goldwind A/H (002202.SZ) remains EW on valuation despite cautious views on wind turbine OEMs [5][21] 3. Underweight (UW) Ratings: - Ming Yang (601615.SS) and Shanghai Electric A/H are rated UW due to high exposure to offshore WTG market and pricing risks [5][21] Additional Important Insights - Public Tendering Trends: - Public wind turbine tenders reached 144GW in 2024, significantly up from 86GW in 2023, indicating strong demand [2][26] - The tendering process has accelerated, with expectations of 15-20GW in 2025 compared to previous years [3][30] - Price Trends: - Onshore wind turbine prices are stabilizing with mild increases expected in 2025, influenced by a convention among manufacturers to maintain fair competition [34] - Despite this, no significant market consolidation is observed, which may limit sustained price rebounds [35] - Future Outlook: - Continued growth in wind installations is anticipated, driven by favorable economics and regulatory support, with projections of 137GW in 2027 [26][30]