Guojin Securities released a research report saying that under the resonance of domestic and overseas demand, the wind power industry has obvious volume signals, and the profitability of the whole machine has improved. Q3 The installed capacity of sea wind picked up, and the installed capacity of land wind grew steadily; The bidding of wind turbines is booming, the bidding price is stable, and the price involution of the industry is expected to improve. With the stabilization of the price of downstream machine enterprises, the industry revenue is flat year-on-year, the current may be the lowest point of industry profitability in a single quarter, the operating cash flow has decreased year-on-year, and the installation season in the fourth quarter has been superimposed on some important sea breeze projects, and it is expected that the industry inventory scale is expected to decline, and the release of overseas orders is expected to drive further recovery of profits.

The main views of Sinolink Securities are as follows:

In Q3, the installed capacity of sea breeze picked up, and the installed capacity of land wind increased steadily.

According to the statistics of the National Energy Administration, in the first three quarters of 2024, the new installed capacity of domestic wind power was 39.1GW, a year-on-year increase of 16.8%, of which the new installed capacity of sea wind and land wind was 2.47GW/36.7GW, respectively, a year-on-year increase of +72.7%/+14.4%. The new installed capacity of sea breeze and land wind in Q3 was 1.43GW/32.1GW, respectively, +397%/+15% year-on-year.

The bidding of wind turbines is booming, the bidding price is stable, and the price involution of the industry is expected to improve.

From January to September, the new bidding scale of domestic wind turbines was 119GW, a year-on-year increase of 93%, considering that most of the grid-connected construction of wind turbine projects tendered this year will be carried out in 2025, it is expected that the new installed capacity in 2025 is expected to achieve a substantial increase. In terms of the average bidding price, the average bidding price of wind turbines in the first three quarters remained at the level of 1300-1400 yuan/kW. Recently, a number of machine companies at the Beijing Wind Energy Exhibition have signed industry self-discipline conventions, and the "price involution" of the whole machine link is expected to improve.

The industry's revenue was flat year-on-year, and the profit may have bottomed out.

3Q24 achieved revenue of 50.7 billion yuan, +0.6% year-on-year; the net profit attributable to the parent company was 1.3 billion yuan, a year-on-year increase of -34.5%; The gross profit margin and net profit margin of sales were 14.6%/2.8%, a year-on-year increase of -2. 5pct/-1.2pct, -1.5pct/-2.8pct quarter-on-quarter, the short-term reasons for the decline in profitability include less transfer of wind farms by complete machine enterprises in the third quarter, as well as the decline in the proportion of overseas revenue of some enterprises, and the adjustment of income structure. 3Q24 ROE was 0.73%, -0.37pct YoY and -0.67pct QoQ.

Operating cash flow declined year-on-year, and the industry's stocking efforts hit a record high.

According to the statistics of SW wind power equipment, the net operating cash flow of the wind power industry in 3Q24 was 2.9 billion yuan, a year-on-year decrease of 60%, and turned positive month-on-month. The inventory scale of the wind power industry in 3Q24 was 75.4 billion yuan, +12% year-on-year and +8% quarter-on-quarter, setting a new record high in the industry.

The

trend of improving the profitability of the whole machine link continues, and the release of overseas orders is expected to drive further recovery of profitability.

Judging from the performance disclosed by the head machine enterprises, the gross profit margin of the head machine enterprises in the third quarter has improved compared with the second half of 2023. The gross profit margin of some complete machine enterprises decreased month-on-month, which is expected to be mainly affected by the seasonal decrease in wind farm power generation and the decrease in electricity sales revenue with high gross profit margin. Recently, the overseas orders of the leading machine enterprises have broken through significantly, and the scale of overseas orders in hand at the end of the third quarter of Goldwind increased by 45% year-on-year. The profitability of overseas projects is good, and the increase in the proportion of overseas revenue is expected to drive the profitability of the whole machine link to further repair.

Under the trend of large-scale wind turbines, the supporting capacity of parts and components is structurally tight, and the profitability of some enterprises has improved in 3Q24.

The large-scale industry has accelerated, since the beginning of the year, the trend of 8MW and above land wind large models is obvious, and some machine enterprises account for more than 20% of the orders in hand of 8MW and above, a significant increase from the beginning of the year.

The scale of inventory and contract liabilities in the whole machine and tower pile links has increased rapidly, and the industry has obvious signal of volume expansion.

From the perspective of inventory scale, as of the end of the third quarter, except for the inventory of blades, the inventory scale of the remaining links increased year-on-year, of which the tower pile and the whole machine link increased significantly, which is expected to be mainly for the fourth quarter of the peak season of installation and pre-production preparation in 2025. The scale of contract liabilities in blades, tower piles and complete machine links has increased rapidly, which verifies that the downstream demand is high, and the company has abundant orders in hand.

Investment advice: focus on three main lines.

1) Wind turbine segments where the trend of profit improvement is expected to continue: Goldwind (002202.SZ), Sany Renewable Energy (688349.SH), Mingyang Intelligent (601615.SH);

2) Tower links and submarine cable links that benefit from sea breeze and sea logic: Dongfang Cable (603606.SH), Taisheng Wind Energy (300129.SZ), Haili Wind Power (301155.SZ);

3) Under the background of the acceleration of large-scale wind turbines, the production capacity is structurally tight, and the profit is expected to be the first to repair the spindle and casting and forging links: Jinlei shares (300443.SZ) and Riyue shares (603218.SH).