Decarbonization And Electrification Will Fuel Global Wind Transformation

Key Takeaways

• Goldwind's strong order backlog, leadership in large-capacity turbines, and expanding international presence position it for sustained revenue and margin growth above industry expectations.
  
• Favorable green policies, cost-competitive wind energy, and high-margin digital services are set to drive robust, recurring earnings and superior long-term profitability.
  
• Rising domestic competition, declining utilization rates, and global oversupply are pressuring margins, liquidity, and future growth, while international expansion faces risk from protectionism and new technologies.

Catalysts

Provides wind power solutions in China and internationally.

• Analyst consensus points to Goldwind's record order backlog as driving robust future revenue growth, but this likely underestimates the impact-order backlog of 54.8 gigawatts with 106% year-on-year sales capacity growth and a successful shift to large-capacity turbines (over 80% of orders above 6 MW) positions Goldwind for several years of outsized, margin-accretive revenue gains as electrification accelerates globally.
  
• Analyst consensus flags international growth potential, yet the rapid acceleration in overseas backlog-7.4 gigawatts already secured, broadening presence in high-growth APAC/Latin American markets, and 37% growth in service capacity-suggests Goldwind is set to capture disproportionate global market share, driving structurally higher revenue and net margin expansion than peers expect.
  
• The sustained collapse in the levelized cost of energy for both onshore and offshore wind (now as low as 2.9 US cents per kilowatt hour in China) is vastly expanding the addressable market, and as wind outpaces thermal in grid connections, Goldwind's scale and cost-competitive positioning enable supernormal earnings growth relative to traditional power sources.
  
• China's intensive green policy push-including the new energy law, unified national energy market, green certificate system by 2027, and ambitious targets to double non-fossil fuel power-will accelerate multi-year wind demand, with Goldwind's established domestic leadership translating directly to compounding revenue and net profit improvements.
  
• With services and digital wind solutions growing at 37% annually, and utilization rates at the company's wind farms running 168 hours above national average, Goldwind's high-margin recurring revenue streams and technology leadership will drive superior operating leverage, elevate long-term margins, and deliver consistent, resilient earnings upgrades.

Goldwind Science&Technology Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Goldwind Science&Technology compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Goldwind Science&Technology's revenue will grow by 20.5% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 2.9% today to 5.1% in 3 years time.
• The bullish analysts expect earnings to reach CN¥5.8 billion (and earnings per share of CN¥1.57) by about August 2028, up from CN¥1.9 billion today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 15.1x on those 2028 earnings, down from 26.2x today. This future PE is lower than the current PE for the CN Electrical industry at 49.5x.
• Analysts expect the number of shares outstanding to grow by 0.21% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 12.08%, as per the Simply Wall St company report.

Goldwind Science&Technology Future Earnings Per Share Growth

Risks

• Goldwind's heavy concentration in the Chinese wind market, which accounted for 68% of global installations and generates the majority of its revenues, exposes the company to pricing pressures and potential margin compression as domestic competition intensifies and market reforms reduce state support, threatening long-term net margins.
  
• Despite optimism over revenue growth, the average wind power utilization hours in China declined year-on-year while power market reforms are pushing renewables towards full market entry, which may lower guaranteed offtake and add price volatility for wind producers, negatively affecting revenue stability and profitability.
  
• Trade receivables remain high at 21% of total assets with 173 days to collect, and although recently improved, this sustained reliance on state-linked and slow-paying customers could strain liquidity and restrict access to working capital, potentially creating risks for net cash flows.
  
• Goldwind's low gross profit margin from its core WTG manufacturing business, reported at 7.9%, highlights the impact of ongoing wind turbine oversupply and price wars globally, exacerbating margin compression and posing a risk to net earnings as the industry faces further commoditization.
  
• While renewable energy remains a policy priority in China, the sector faces emerging risks from global protectionism and increasing competition from solar and advanced batteries, which could erode Goldwind's market share internationally and cap long-term revenue and earnings growth if the company fails to innovate at the pace of its peers.

Valuation

• The assumed bullish price target for Goldwind Science&Technology is CN¥14.6, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Goldwind Science&Technology's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CN¥14.6, and the most bearish reporting a price target of just CN¥9.14.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be CN¥113.9 billion, earnings will come to CN¥5.8 billion, and it would be trading on a PE ratio of 15.1x, assuming you use a discount rate of 12.1%.
  
• Given the current share price of CN¥11.52, the bullish analyst price target of CN¥14.6 is 21.1% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.