1Q 2014 Corporate Presention

SZEx Stock Code: 002202 HKEx Stock Code: 2208
2014 First Quarter Results
Business Review
Financial Results
Company Outlook
Industry Review
Adama, Ethiopia
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Industry Review
Business Review
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Company Outlook
Global Wind Demand Expected To Rebound
Wind equipment deliveries could increase 30% to nearly 47GW in 2014, driven mainly by stronger wind farm development activity in the United States and China.
Regional Wind Installations and Demand Forecast (MW)
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Asia has become the largest wind market. Asian demand is expected to grow 13% in 2014. Stable growth is expected to continue for several years as China addresses environmental and economic concerns.
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Due to the expiration and renewal of the PTC in the US, Americas demand is relatively volatile. The PTC will expire again in 2015.
Source: Navigant Research, World Market Updates 2010‐2014 (published by BTM in March 2014).
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Direct Drive Gained Market Share Direct drive represented 28.1% of the global wind equipment supplied in 2013, up from 19.5% in 2012, as the market has recognized direct drive’s technical advantages.
Direct Drive’s Market Share（%）
Others
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The number of commercially‐available direct drive turbines has increased, with more than 20 companies offering commercial direct drive solutions to the market.
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The combined global market share of Goldwind, Enercon, and XEMC in 2013 was 23.6%. Others represented 4.5%.
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10,560MW of direct drive wind turbines were installed in 2013. Excluding Enercon and Wind World India, which produce direct drive annular generators, 6,516MW of permanent magnet direct drive generators were installed, representing 17.3% of the market.
Enercon
Goldwind
Source: Navigant Research, World Market Update 2009‐2013 (published by BTM in March 2014).
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Domestic Public Tenders Active In 1Q14
Public tender volumes continued to rise in the first quarter, while average public bidding prices for 1.5 MW units were relatively stable.
China Quarterly Public Tenders (GW)
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Public tenders volumes have risen for the past two quarters, reaching 7.0 GW during the 1Q2014, up 83% compared to 3.8 GW in 1Q2013. First quarter tenders represent the highest level in 3 years.
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Most of the projects are located in the North or Northwest area, such as Shanxi, Shandong, Xinjiang, etc.
China Monthly Average Public Bidding Price for 1.5MW Units (RMB/KW)
Goldwind
Average
Source: Company estimates. No public tenders held in July 2012.
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Some industry participants expect average bidding prices will remain stable in 2014.
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Monthly variations are partly due to the differences in project requirements and turbine specifications.
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China Grid Update
Huainan‐Nanjing‐Shanghai 1,000kV AC transmission line approved by NDRC, enabling accelerated development in coastal Jiangsu and large‐scale wind farm utilization.
Key Newly Installed & Planned Transmission Lines
Completed
Under construction
Scheduled to Start 2014
Approval Expected 2014
3 Horizontal - 3 Vertical
Other Key Transmission Lines
Curtailment rate over 5%
Curtailment rate 2-5%
Curtailment under 2%
Source: Government announcements. Note: Transmission routes are approximate.
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Sunrise at Musselshell Wind Farm, Montana, USA
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Wind Turbines Sales Volumes
Sales of wind turbines stronger in 1Q14 compared to 1Q13.
Realized External Sales Volumes (MW)
Source: Company filings.
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Goldwind does not report quarterly sales volumes. However, an increase in wind turbine sales did contribute to higher revenues in 1Q14 compared to 1Q13.
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Goldwind realized 2,923 MW of external sales in 2013, up 13% from 2,583 MW in 2012.
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Sales of 2.5MW WTGs increased significantly, to 22% of total sales in 2013 from 14% of in 2012. Page 7
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Backlog Strong at 8,125 Megawatts
As China’s industry leader, Goldwind has been very competitive in garnering new orders. Goldwind’s backlog climbed 8% in 1Q2014 to 8,125 MW as of 31 March 2013.
Wind Turbine Order Backlog (MW)
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The backlog typically increases during 1Q because of relatively slow shipments due to winter weather. Last year, the backlog climbed 16% in 1Q13.
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The backlog was comprised of 83% 1.5MW units, 13% 2.5MW units and 4% other units.
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Our backlog covers nearly every province in China, and is strongest in the Northwest and Central regions.
Source: Company filings. The international backlog didn’t include 215 MW order announced in Panama on April 25th.
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New Projects Focused in Low Wind Speed Areas
A majority of the 4th batch of 27.6 GW of proposed projects are located in low wind speed areas. It was announced in late February 2014.
4th Batch of Wind Farm Projects Approved By NEA (GW)
• The 4th batch is slightly smaller than the 3rd batch.
27.6GW
• Over 50% of the 4th batch of approved wind farm projects are located in Class IV wind zones, such as Hunan, Shandong, Jiangsu, Guangxi, and Guizhou.
• Over 65% of projects are located in mountain area.
• Approximately one‐third of the projects are in high humidity or coastal regions, requiring higher specification wind turbines.
• Only 6% of the 4th batch was tendered during 1Q2014.
Source: Company estimates..
Fourth Batch
February 2014
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2.0MW Turbines Designed for Low Wind Speed
Largest swept area per kW & highest ultra‐low wind speed power output among 2MW units. Average wind speeds as low as 5.2 m/s are economically viable.
Model
GW115/2.0MW
Diameter
115 m
Cut‐in Wind Speed
2.5 m/s
Rated Wind Speed
9 m/s
Operating temp range
‐ 30°C to + 40°C
Operating humidity range
Onshore areas with high humidity (humidity greater than 80% for 6 mo/year)
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DDPM design ‐ highly reliable and efficient.
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Single‐hook lifting weight <50 tons, the lightest in the +2.0 MW market ‐ reducing installation costs in difficult terrain.
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Spherical‐cast wheel structure provides extra strength, enabling turbine to sustain temperatures as low as minus 40° C.
Source: Company filings
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Wind Farm Development Update
Goldwind reported an increase in fixed assets as several wind farms completed testing and commenced generating revenue at the end of March.
Wind Farm Development Update
Average Wind Farm Utilization Rate
Goldwind’s annual utilization rate (hours)
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Fixed assets increased by RMB 2.4 billion during 1Q14 to RMB 5.6 billion as of 31 March 2014. Under‐construction assets decreased by approx. the same amount to RMB 4.8 billion.
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A portion of that shift represents wind farms that completed testing and began generating revenue. Goldwind first quarter utilization rate (hours)
Under‐Construction & Fixed Assets
Construction in Progress (million RMB)
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Goldwind’s wind farm average utilization rate was weaker in 1Q14 due to lower wind speeds, especially in Xinjiang and Shanxi.
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Other wind farm operators have also reported a decrease in wind speeds during 1Q14.
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For comparability, 1Q data excludes wind farms commissioned after 1 January 2013.
Fixed Assets (million RMB)
Source: Company filings and estimates.
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Dabancheng Wind Farm, Xinjiang, China
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Annual Financial Results
1Q14 gross margin up 14% yoy on increase in wind farms, and may decrease in 2Q‐4Q as turbines sales expected to represent greater proportion of revenues.
Revenues (RMB millions)
Gross Margin (%)
Gross Profit (RMB millions)
Net Profit (RMB millions)
Source: Company filings. Annual data are in accordance with PRC China GAAP. Net profit is net profit attributable to owners of the company.
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Quarterly Financial Results
Gross profit increased 173% compared during the first quarter year on year due to higher realized quarterly wind turbines sales volumes.
Quarterly Revenues (RMB millions)
Quarterly Gross Profit (RMB millions)
Quarterly Gross Margin (%)
Net Profit (RMB millions) & Margin Source: Company filings. Quarterly data are in accordance with PRC GAAP. Net profit is net profit attributable to owners of the company. Page 14
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Net Operating Cash Flow
Higher proportion of bills collected and maturity of a significant amount of notes payable contributed to weaker net operating cash flow.
Net Cash Flow From Operations (RMB millions)
2012
RMB 2,500 million
2013
RMB 1,930 million
• Net operating cash flow dropped to –RMB1.9 billion in 1Q14 from –RMB0.7 billion in 1Q13.
• Goldwind reduced accounts payable by nearly RMB 2 billion during 1Q14, while receivables remained stable.
• Higher proportion of bills receivable collected from customers weakened operating cash flow.
2011
- RMB 4,133 million
Cash Conversion Cycle (Days on Hand)
• Major uses of working capital, receivables and inventories, were relatively stable in 1Q14.
• A major source of working capital, payables, decreased by RMB 1.9 billion during 1Q14, in accordance with the terms of our supply contracts. Source: Company filings. Quarterly data are in accordance with PRC GAAP.
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Capital Structure Overview
Cash on hand decreased by RMB 2.0 billion to RMB 2.4 billion as of 31 March 2014 as Goldwind used cash to reduce payables.
Cash and Total Debt (RMB millions)
Cash
Total Debt
Bonds
Net Debt
• Decrease in cash on hand was driven mainly by working capital needs, not capital spending.
• Capital expenditures were relatively small in 1Q14 due to winter weather conditions in China.
• Debt‐to‐equity ratio was relatively stable at 60%.
Source: Company filings. Financial data are in accordance with PRC GAAP.
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Shady Oaks Wind Farm, Illinois, USA
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Financial Results
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A Global One‐stop Provider of Clean Power and Energy Conservation Technologies & Services
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.
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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.
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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
kathryntsibulsky@goldwind.com.cn
Ms. Jessie Wang
wangweiqi@goldwind.com.cn
+ 86‐10‐6751‐1888 x 1021