Global Electrification And Digital Services Will Expand Wind Markets

Key Takeaways

• Accelerating global electrification and sharp declines in wind power costs position Goldwind for outsized market share and sustained, above-forecast revenue growth worldwide.
  
• Expansion in digital services, strong balance sheet, and strategic investments enhance recurring high-margin income and reinforce global leadership in integrated energy solutions.
  
• Intensifying competition, slowing domestic growth, rising credit risks, and limited innovation threaten long-term profitability despite expanding international orders.

Catalysts

Provides wind power solutions in China and internationally.

• While analyst consensus notes the record wind turbine backlog and strong external sales growth as supportive for future revenue, this may dramatically understate potential as surging public tendering in China combined with global electrification is likely to drive compound annual revenue growth well beyond current forecasts over the next several years.
  
• Analyst consensus sees growing international orders as a positive, but given Goldwind's expansion into high-growth emerging markets and leadership in efficient direct-drive technology, there is substantial upside for both revenue scale and net margins as offshore and larger-capacity turbine uptake accelerates worldwide.
  
• The rapid decline in the cost of wind power compared to fossil fuels and solar, coupled with supportive energy policy globally, suggests Goldwind can capture much larger market share and deliver outsized, sustained revenue growth as utilities seek utility-scale wind projects.
  
• Goldwind's increasing integration of digital operation, maintenance, and smart grid connectivity services positions it to generate high-margin, recurring revenue streams, which can smooth out earnings volatility and support a significant uplift in long-term profitability.
  
• The company's strong balance sheet improvement, with a rising cash-to-assets ratio and controlled debt, gives it firepower to accelerate innovation, invest in energy storage solutions, and pursue strategic partnerships, all of which can drive higher future earnings and position Goldwind as a dominant global integrated energy solutions provider.

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 20.8% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 2.9% today to 4.8% in 3 years time.
• The bullish analysts expect earnings to reach CN¥5.5 billion (and earnings per share of CN¥1.59) 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 15.9x on those 2028 earnings, down from 23.3x today. This future PE is lower than the current PE for the CN Electrical industry at 49.2x.
• Analysts expect the number of shares outstanding to grow by 2.57% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 11.98%, as per the Simply Wall St company report.

Goldwind Science&Technology Future Earnings Per Share Growth

Risks

• Downward pressure in the core Chinese market, with China accounting for 70 percent of global new installations but recording a 5.7 percent year-over-year decline in Q1 grid connection, may signal that overall demand growth is leveling off, which could constrain long-term revenue growth.
  
• Intense price competition is evidenced by the monthly public bidding price for turbines, and the company's Q1 2025 comprehensive profit margin fell by 3.11 percent, illustrating margin compression that could persist as the market becomes more commoditized, directly impacting net margins and profit sustainability.
  
• Rising days of trade receivables, now accounting for 20 percent of total assets and growing to 174 days, along with missed performance targets on receivable collections, indicate mounting credit risk and working capital pressure, raising the risk of future cash flow challenges or increased credit losses, which could affect earnings.
  
• Though international order growth was strong, growing dependence on overseas markets exposes Goldwind to heightened risks from currency swings, foreign regulations, and geopolitical unpredictability, all of which could lead to greater volatility in revenue and earnings.
  
• Despite growth in larger turbine segments, there is little evidence in the text of transformative advances in offshore wind technology or new value-add service models, which could put Goldwind at risk of losing market share to more innovative competitors and limit its ability to sustain revenue growth as the industry evolves.

Valuation

• The assumed bullish price target for Goldwind Science&Technology is CN¥13.6, 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¥13.6, 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¥114.7 billion, earnings will come to CN¥5.5 billion, and it would be trading on a PE ratio of 15.9x, assuming you use a discount rate of 12.0%.
  
• Given the current share price of CN¥10.56, the bullish analyst price target of CN¥13.6 is 22.4% 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.