DHI(SZ:002487)2025-04-23 01:48Summary of the Conference Call Records Company Overview - The company discussed is Dajin Heavy Industry, which operates in the offshore wind power sector, particularly in the European market. Key Points and Arguments 1. Financial Performance: In Q1 2025, Dajin Heavy Industry reported a net profit of approximately 230 million CNY, with a non-recurring profit of 250 million CNY, including nearly 50 million EUR in foreign exchange gains. After excluding these gains and domestic wind farm profits, the combined profit from overseas and domestic operations was about 170-180 million CNY, aligning with market expectations, marking the company's second consecutive quarter of performance realization [1][5][11]. 2. European Offshore Wind Market: The European offshore wind sector is strategic, with a cumulative installed capacity of 285 GW expected by the end of 2024, of which 37 GW is offshore. The EU aims to increase the wind power share to 35% by 2030. Dajin Heavy Industry benefits from the shortage of local production capacity in Europe, being the only Chinese company to report profits [1][6][10]. 3. Growth Projections: The average new installed capacity for offshore wind in Europe from 2017 to 2024 is projected at 3 GW/year, with a lower than expected 2.6 GW in 2024. However, improvements in approval processes, declining interest rates, and alleviation of power consumption bottlenecks are expected to sustain market growth in the coming years [1][7][8]. 4. Approval and Capacity Growth: The approved capacity for offshore wind in Europe for 2024 is about 20 GW, a nearly 50% increase year-on-year, with Germany, the UK, and the Netherlands accounting for 17-18 GW. Cumulative new installed capacity from 2025 to 2030 is expected to reach 47 GW, averaging 8 GW annually [1][8][9]. 5. Market Competition: The European offshore wind market is concentrated, primarily led by major players like SAFE and EW in marine foundation manufacturing. A global shortage of marine foundation capacity is anticipated starting in 2028, which will support domestic companies' expansion abroad [1][9]. 6. Dajin's Competitive Edge: Dajin Heavy Industry is the only supplier in the Asia-Pacific region to achieve offshore delivery in Europe, having completed significant projects like the Moray West in the UK and the Noi project in France. The company has enhanced its profitability through the DAP model and has secured long-term capacity agreements with European developers [1][3][10]. 7. Future Earnings Expectations: Dajin Heavy Industry is expected to achieve profits of 800-900 million CNY in 2025 and exceed 1.2 billion CNY in 2026, entering a period of performance realization with high growth potential and certainty. The current market valuation corresponds to a 20x P/E ratio for this year and 15x for the next year [1][11]. Additional Important Information - The company faced challenges in Q3 2023, with profits dropping to 135 million CNY and further declining to 17 million CNY in Q4 due to project delays and increased costs related to the Moray West project. This impacted profits by approximately 90 million CNY [2][4]. - Dajin's overseas revenue ratio is increasing, from about 50% in 2023 to 56% in the first half of 2024, indicating a strategic shift towards international markets [1][11].