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3Q 2014 Results
SZEx Stock Code: 002202
HKEx Stock Code: 2208
Business Review
Financial Results
Company Outlook
Industry Review
Adama, Ethiopia
Page 1
Industry Review
Business Review
Financial Results
Company Outlook
Industry Policy Update
China reiterated strong government support for wind power by introducing several policies that promote the healthy and orderly development of wind industry.
NDRC Proposed a Reduction of the Wind Tariff
“Renewable Portfolio Standard” May Be Issued
In September 2014, the NDRC released a draft proposing adjustments to the onshore wind feed‐in tariff. The NDRC is collecting feedback from the industry. According to the draft:
• The proposed new tariff would be applied to new wind farms completed after 30 June 2015.
• The tariff for Tier I, II, III and IV wind regions would be reduced by 2‐4 cents in most areas, while the reduction for some regions would be as high as 7 cents.
Sources close to the NDRC stated that the proposed renewable portfolio standard plan was approved internally by NDRC and submitted to the State Council for final approval. Some details of the plan were also released:
•
Wind, solar and bio‐mass are the key renewable power resources covered by the plan.
•
Basic and advanced renewable consumption ratios proposed for 6 tiers with targets for 2015, 2017 and 2020.
•
Local grid and government authorities are responsible for achieving the renewable power consumption targets.
NEA Set New Standards for Public Tenders and Bids
Encourage Timely Construction of Approved Projects
On 25 June 2014, the NEA introduced the “Notice on Relevant Requirements for Regulating Orders in the Wind Power Equipment Market”(“国能新能[2014]412号”), setting certification requirements and proposing quality acceptance standards.
•
Establishes a requirement for “type approval” certification for wind turbine bids submitted for public tenders starting 1 July 2015 in an effort to ensure quality.
•
Proposes quality acceptance standards to reduce delayed or failed quality acceptance and expedite payments to wind equipment manufacturers.
•
Encourages fair and open wind turbine tender market and seeks to prevent anti‐competitive practices such as regional protectionism.
•
Enhances information disclosure and the regulation of the wind equipment market.
On 12 October 2014, the NEA introduced the “Notice for Dedicated Regulation Work for New Power Source Project Investment and Development Practice ” The notice seeks to:
•
Prevent pre‐construction speculation on new projects.
•
Implement a project development plan to encourage timely investment in new project development.
•
Strengthen regulation of equity transfer and construction progress. Source: Government announcements. Page 2
Industry Review
Financial Results
Business Review
Company Outlook
China Wind Turbine Demand Is Robust
Domestic demand outlook remains strong as developers look beyond short‐
term obstacles such as slower wind speeds and wind power curtailment.
China Annual Newly Installed Capacity (GW)
18.9
17.6
13.8
1H13
1H13
5.5
2009
•
NDRC’s draft proposal to adjust the wind feed‐in tariff in 2015 has encouraged developers to plan for a high level of construction activity next year.
13.0
3.3
2008
The National Energy Administration (NEA) targets at 18 GW of newly installed capacity in 2014.
16.1
6.2
2007
•
2010
2011
2012
1H14
5.5
2013
1H14
7.2 7.2
2014E
Installed vs. Connected Capacity (GW)
•
•
NEA reported 84.8 GW of wind power capacity connected and producing power as of 30 September 2014, up from 77.2 GW as of 31 December 2013.
84.8
30 Sep
CWEA’s estimate for 1H 2014 installations implies cumulative installed capacity of 98.6 GW as of 30 June 2014, suggesting that the connection rate remained stable at 84% of installed capacity.
Sources：Installed capacity: Chinese Wind Energy Association; Connected capacity: China Electricity Council and NEA; Target Installations: NEA and China Wind Road Map 2050.
Page 3
Industry Review
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Financial Results
Company Outlook
Public Bidding Price for 1.5 MW Units Stable
During the first three quarters of 2014, the average public bidding price for 1.5 MW units remained stable at approximately RMB 4,000 per kW.
China Monthly Average Public Bidding Price for 1.5 MW Units (RMB/KW)
Goldwind
Average
Jan-10
5,071
Jan/10
Jan-11
3,850
Jan-12
3,680
Jan/11
Jan/12
Jan-13
3,815
Jan/13
Jan-14
4,099
Sep-14
4,085
Jan/14
•
Average bidding price for 1.5 MW units has remained in the range of RMB 3,900 – 4,100 per kW for more than one year.
•
Monthly variations are partly due to the differences in project requirements and turbine specifications.
Source: Company estimates. No public tenders held in July 2012.
Page 4
Industry Review
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Financial Results
Company Outlook
Public Tenders Up 37% During 1Q‐3Q 2014
Developers launched a total of 17.3 GW of public tenders for wind turbine generators during the first three quarters of 2014, up 37% from 2013.
China Public Tenders for Wind Equipment (GW)
+37%
1Q-3Q: 12.6 GW
1Q-3Q: 17.3 GW
6.8
5.8
4.8
4.8
3.8
2.2
4.7
4.0
2.5
2.3
1.4
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
•
Source: Company estimates.
Public tenders are typically slowest in the third quarter of each year. Public tenders fell to 4.7 GW in 3Q14 from 5.8 GW in 2Q14, but still remained 18% higher than 4.0 GW in 3Q13.
Page 5
Industry Review
Business Review
Financial Results
Company Outlook
Wind Speeds Remained Below Normal in 3Q14
China experienced unusually slow winds during the first three quarters of 2014, causing wind farm utilization to drop 12% year‐over‐year to 1,340 hours.
China Wind Farm Utilization Hours
Full-Year
1Q-3Q
2,077
2,074
2,047
1,929
1,890
-12%
1,522
1,340
2009
2010
2011
2012
2013
2014
•
Wind speeds remained slow during 3Q14. As a result, utilization continued to lag, decreasing 12% during the first three quarters of 2014.
•
Goldwind also recorded slower wind speeds and lower utilization hours at its wind farms in Xinjiang, Shanxi, and Inner Mongolia.
Source：Utilization Hours: NEA (http://www.nea.gov.cn/2014‐02/10/c_133103830.htm, http://www.nea.gov.cn/2014‐03/06/c_133166473.htm，
http://www.nea.gov.cn/2014‐10/16/c_133721574.htm).
Page 6
Industry Review
Financial Results
Company Outlook
Business Review
Sunrise at Musselshell Wind Farm, Montana, USA
Page 7
Industry Review
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Financial Results
Company Outlook
Wind Turbines Sales Volumes
Goldwind benefited from stronger demand for wind power equipment during the first half of 2014, experiencing a significant increase in realized sales volumes.
Realized External Sales Volumes (MW)
2.5 MW and larger
1.2 MW and 1.5 MW
750 kW
Source: Company filings. These data exclude internal sales to Goldwind’s own wind farms.
•
Goldwind discloses its wind turbine sales volumes semi‐annually. First and third quarter sales volumes are not disclosed.
•
A significant increase in wind turbine sales volumes contributed to higher revenues in 1Q‐3Q 2014 compared to the same period of 2013.
•
Revenues from Goldwind wind farm business also increased significantly during 1Q‐3Q 2014 compared to the same period of 2013 due to an increase in operational capacity. Page 8
Industry Review
Business Review
Financial Results
Company Outlook
Backlog Stable Despite Strong Deliveries in 3Q14
Goldwind’s backlog was almost unchanged at 8,928 MW on 30 Sept 2014, even though the company experienced a seasonal increase in sales volumes.
Wind Turbine Order Backlog (MW)
Successfully Bid
Under Final Contract
8,089
7,655
6,327
2,397
2,515
3,931
4,086
31-Dec-11
31-Dec-12
4,576
31-Mar-13
3,928
4,097
4,972
4,831
30-Jun-14
30-Sep-14
8,125
3,539
3,718
4,205
4,157
4,550
30-Jun-13
8,928
7,520
6,600
3,079
Source: Company filings.
7,831
8,900
4,291
3,626
3,364
30-Sep-13
31-Dec-13
31-Mar-14
Page 9
Industry Review
Business Review
Company Outlook
Financial Results
Dabancheng Wind Farm, Xinjiang, China
Page 10
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Industry Review
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Financial Results
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1Q‐3Q Year‐to‐Date & Annual Financial Results
Net profit increase by over 500% in the first three quarters of 2014. Profitability climbed due to higher revenues, a shift in revenue mix, and cost controls.
Gross Profit (RMB million) & Margin Revenues (RMB million)
35.0%
5,000
29.1%
4,500
17,596
30.0%
4,000
23.5%
21.2%
3,500
12,843
11,324
+49%
12,308
3,000
10,621
4,128
16.6%
20.9%
15.4%
20.0%
2,606
2,000
25.0%
3,093
2,500
7,119
+107%
15.0%
2,129
1,500
1,740
10.0%
1,491
1,000
5.0%
500
‐
2010
2011
2012
2013
1Q-3Q13
1Q-3Q14
0.0%
2010
Net Profit (RMB million) & Margin
2,500
2,290
2012
2013
1Q-3Q13
1Q-3Q14
Earnings Per Share (RMB)
20.0%
1.00
11.3%
2011
15.0%
0.97
0.2
0.90
0.15
2,000
0.80
13.0%
4.7%
10.0%
1.4%
1,500
3.5%
0.1
2.6%
0.70
5.0%
0.05
+536%
0.60
+536%
0.0%
0.50
1,195
1,000
‐5.0%
0.40
0
0.44
0
‐0.05
0.30
‐10.0%
‐0.1
500
607
0.20
153
428
188
0.23
‐15.0%
0.10
‐
0.06
0.16
0.07
‐0.15
‐20.0%
‐
2010
2011
2012
2013
1Q-3Q13
1Q-3Q14
‐0.2
2010
2011
2012
2013
1Q-3Q13
Source: Company filings. Annual & interim data are in accordance with PRC GAAP. Net profit is net profit attributable to owners of the company.
1Q-3Q14
Page 11
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Industry Review
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Quarterly Financial Results
Results also improved dramatically in 3Q14 compared to 3Q13. As expected, gross margin decreased in 3Q14 versus 2Q14 due to seasonally higher turbine sales.
Quarterly Gross Profit (RMB million)
Quarterly Revenues (RMB million)
8,000
+59%
7,000
6,150
5,378
6,000
+96%
2,000
1,722
1,800
1,600
5,189
1,400
1,115
5,000
3,873
1,200
3,037
2,463
3,000
2,000
1,000
2,295
1,700 1,784
909
878
852
4,000
800
600
1,434
951
400
1,000
186
295
461
443
407
170
200
‐
‐
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
Quarterly Gross Profit Margin (%) Net Profit (RMB million) & Margin
+5.3%
32.2%
35.0%
30.0%
29.9%
14.1%
9.2%
28.0%
10.0%
1,200
22.7%
25.0%
16.5% 16.5% 15.9%
20.0%
17.9%
19.3%
15.0%
1,400
21.5%
3.7%
1,000
800
2.1%
0.4%
3.4%
+807%
4.6%
2.6%
2.5%
864
3.5%
5.0%
‐1.4%
15.0%
0.0%
600
11.0%
280
10.0%
400
5.0%
200
6
0.0%
66
115
-34
240
32
60
95
‐5.0%
51
‐10.0%
‐
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
Source: Company filings. Annual & interim data are in accordance with PRC GAAP. Net profit is net profit attributable to owners of the company.
Page 12
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Net Operating Cash Flow
Accelerated cash collections offset by an increase in payments for inventories, higher taxes, and higher employee pay.
Net Cash Flow From Operations (RMB millions)
2,710
2,657
1Q-3Q 2012
RMB 1,295 million
1,835
1,447
1,436
1,205
1,316
1Q-3Q 2013
RMB 614 million
1Q-3Q 2014
- RMB 57 million
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
-732
-489
-1,127
-1,792
-804
-1,587
-1,909
-3,925
1Q-3Q 2011
- RMB 6,843 million
• Net operating cash flow was ‐RMB 57 million in 1Q‐3Q 2014 versus RMB 614 million during the same period of 2013. • Cash paid for inventory, taxes and employee pay increased a combined RMB 2,940 million over the same period.
Note: Quarterly data are in accordance with PRC GAAP.
Page 13
Industry Review
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Company Outlook
Liquidity Ample due to Seasonal Activity
Collections boosted cash to RMB 8.1 billion during the seasonally strong third quarter, bringing net debt down to RMB 3.3 billion as of 30 September 2014.
Cash and Total Debt (RMB millions)
8,142
6,962
5,784
Cash
4,685
5,540
4,455
4,043
2,412
Total Debt
< bank loans
6,001
6,475
6,378
7,106
7,755
8,314
< corporate bonds
due Feb. 2015
9,845
Net Debt
11,484
-961
691
1,694
1,566
3,300
3,342
5,902
31 Dec 2012
•
•
31 Mar 2013
30 Jun 2013
30 Sep 2013
31 Dec 2013
31 Mar 2014
5,802
30 Jun 2014
30 Sep 2014
Robust cash collections doubled cash on hand to RMB 8.1 billion as of 30 September 2014 from RMB 4.0 billion as of 30 June 2014.
The ample cash on hand will be spent on inventory purchase prepared for strong delivery in the next 12 months.
Source: Company filings. Financial data are in accordance with PRC GAAP. Page 14
Industry Review
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Shady Oaks Wind Farm, Illinois, USA
Page 15
Industry Review
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Company Outlook
Goldwind Aims to Become a Comprehensive Global Provider of Environmental Technology
Extensive experience in wind power manufacturing, improve our competitiveness through comprehensive solutions, meet varied demands of our customers, and strengthen development of electronic controls and smart micro‐grid products.
Build on our current technology, experience and service business, integrate data collection and IT platforms, develop new strategic service businesses.
Target international standards, compete with global pears, push for internationalization.
Manufacturing
Wind Turbines
Electric Controls
Smart Grid
Services
Investment
Wind Services
Energy Saving
Wind Power
Green Business
Other Clean Energy
Assisted by our financing, technical and managerial capabilities, embrace opportunities in renewable and accelerate growth of our business in wind power and other clean energy industries.
Page 16
Industry Review
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Leveraging Our Core Competitive Advantages
Goldwind has laid foundations for success, leading the wind industry in China and beyond.
Page 17
DISCLAIMER
This document does not constitute, or form part of any offer for subscription or sale of, or solicitation of any offer to subscribe for or sale of any securities of Xinjiang Goldwind Science & Technology Co., Ltd. (the Company), nor shall it be construed as calculated to invite any such offer, nor shall it form the basis of, nor can it be relied on in connection with, or act as an inducement to enter into any contract or commitment whatsoever. Accordingly, any decision in connection with the subscription or acquisition of securities of the Company pursuant to or in connection with any offering must be made solely on the basis of the information to be contained in the prospectus or other offering circular to be issued by the Company in connection with such offering; and no representation is made by the Company in respect of any information in this document, except as contained in such prospectus or offering circular.
FORWARD‐LOOKING STATEMENTS
This presentation contains certain forward‐looking statements with respect to the financial condition, results of operations and
business of the Company, the wind industry in the PRC and certain of the plans and objectives of the management of the Company. Such forward‐looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results of performance of the Company to be materially different from any future results or performance expressed or implied by such forward‐looking statements. Such forward‐looking statements were based on assumptions regarding the Company’s present and future business strategies and the political and economic environment in which the Company and its subsidiaries operate currently and will operate in the future. Reliance should not be placed on these forward‐looking statements, which reflect the view of the Company’s management as of the date of this presentation only.
Page 18
SZEx Stock Code: 002202
HKEx Stock Code: 2208
Goldwind Investor Relations Hotline:
+86‐10‐6751‐1996
Corporate Contacts:
Ms. Jinru Ma
Vice President, Secretary of the Board, and Corporate Secretary
Ms. Kathryn Tsibulsky
[email protected]
Ms. Jessie Wang
[email protected]
+ 86‐10‐6751‐1888 x 1021