Sany Renewable Energy (SH:688349)2025-06-26 15:51Summary of SANY Renewable Energy Conference Call Company and Industry Overview - Company: SANY Renewable Energy - Industry: Wind Power Key Points and Arguments 1. Order and Installation Forecast - The order backlog for 2024 supports a high installation volume for the year, with a focus on the second half of 2025 for installations. The expected installation volume for 2025 is projected to reach 115 GW, potentially exceeding 120 GW, driven by strong orders from 2024 [2][3][4] 2. Price Trends and Profitability - Wind turbine prices are expected to rise by 5% to 10% compared to the average price in 2024, although short-term profitability may be pressured due to low-priced orders from the previous year. However, profitability is anticipated to improve in the second half of 2025 as higher-priced orders are recognized [2][4][15] 3. Gross Margin Expectations - The gross margin for wind turbine main units is expected to significantly improve in 2026, benefiting from price increases and cost reduction measures. The gross margin for 2025 is expected to be slightly lower than 2024 but not significantly [2][5][15] 4. Overseas Market Growth - The overseas market is projected to maintain rapid growth, particularly in emerging countries where demand is strong. SANY Renewable Energy expects overseas sales to increase by over tenfold compared to last year, with significant projects in Central Asia contributing to future revenues [2][6][25] 5. Impact of Domestic Policies - The implementation of the 136 Document has temporarily affected the sale of power stations, with a decrease in sales volume in the first half of the year. However, sales are expected to recover in June [2][7][8] 6. Effects of the 531 Policy - The 531 policy has led to a decrease in power station yield rates due to a bidding mechanism that lowers electricity prices. However, the impact is less severe in economically developed or electricity-deficient regions [2][9][21] 7. Construction and Sales Plans - SANY Renewable Energy plans to sell 1 GW of power stations and construct 1.5 GW in 2025, with construction progress accelerating in the first half of the year [2][10] 8. Wind Turbine Supply and Demand - The first quarter's wind turbine shipment accounted for about 10% of the annual total, with expectations for a concentrated delivery in the second half of 2025, particularly in Q3 and Q4 [2][12][13] 9. Cost Control and Profitability - The company has effectively controlled costs in the wind turbine manufacturing business, with a projected expense ratio of around 7-8% under normal conditions. The sales volume growth is expected to lead to a decrease in the expense ratio [2][16] 10. Future Trends in Wind Turbine Size - The trend towards larger wind turbines is expected to reverse, with a forecast that the proportion of turbines above 7 MW will decrease in the coming years, returning to a focus on turbines below 7 MW [2][19] 11. Impact of Electricity Prices on Revenue - The sale price of power stations is significantly influenced by electricity pricing, with a decrease in price leading to a proportional decrease in total revenue. The 531 policy is expected to result in a substantial decline in yield rates [2][20][22] 12. Contribution of Overseas Projects - Overseas greenfield investment projects are expected to contribute positively to order acquisition and profitability, with higher internal rates of return compared to domestic projects [2][30][31] 13. Supply Chain and Cost Expectations - Supply chain costs are expected to improve in the second quarter, contributing positively to overall performance, although short-term price pressures may still exist [2][32] This summary encapsulates the key insights from the conference call, highlighting the company's strategic outlook, market conditions, and financial expectations.