Goldwind Technology's gross margin will also decline

Goldwind released its mid-year report, with its revenue in the first half of the year falling 18% year-on-year, operating profit down 46% year-on-year, and net profit falling 45% year-on-year to RMB425 million, and EPS of RMB0.16 per share.

In addition, the company also expects net profit from January to September to decline by 50% to 100% year-on-year.

Comments: The gross profit margin of Goldwind Wind Turbine Group dropped sharply by 6% year-on-year, mainly due to the large year-on-year wind turbine prices, and the future cost pressures will gradually appear. The gross profit margin is expected to decline sharply.

In addition, Goldwind's mainframe 2.5MW unit performance is not up to expectations, and it is expected to increase the 3MW hybrid direct drive development of new products to make up for it. In the first half of the year, only 2.5 units of the company’s 2.5MW models were sold, and it is still not possible to achieve economies of scale. At the same time, the average selling price was about RMB 3,770/kW, which did not represent a premium over the 1.5MW models and did not meet expectations. It is expected that the 2.5 MW units applicable to land and sea will be formally put into operation in the second half of the year, which will make the development of the company's mainframes better, but it is difficult to achieve the expected annual sales of 2.5 MW units in 40% of the total.

At the same time, cost pressures will prevent Goldwind 2.5MW units from offering low quotations and market expansion may be limited. As the direct-drive permanent magnet technology is subject to significant cost pressures, we believe that the company has increased the development of 3MW hybrid direct drive in the first half of the year in the hope that the product can take into account the direct drive's excellent performance and make the cost controllable and become a savior product. The company spent a total of 140 million yuan in development expenses in the first half of the year, a substantial increase of 32% from the end of the previous year, which partially confirms this trend.

We maintain Goldwind's 2011-2013 earnings per share of 0.27 yuan, 0.32 yuan, and 0.31 yuan forecast, corresponding to year-on-year growth rates of -68%, 17%, and -4%, respectively. Although the current A-share price has been as low as 2.3x 2011 PB (P/B), we believe that it is difficult for the stock price to perform before the demand for wind power reverses and the rare earth price falls. CICC.