"The company expects that the domestic wind turbine production end will exceed 100GW (including overseas projects) in 2024, and the grid-connected capacity will be about 90GW." On May 15, Sany Renewable Energy Co., Ltd. (688359. SH, hereinafter referred to as "Sany Renewable Energy") said Cao Jing, independent director of Sany Renewable Energy, when talking about the outlook for the wind power market demand in 2024 at the 2023 and 2024 first quarter results briefing.
According to the relevant financial report data of Sany Renewable Energy, the company will achieve operating income of 14.939 billion yuan in 2023, a year-on-year increase of 21.21%; The net profit attributable to shareholders of the listed company was 2.007 billion yuan, a year-on-year increase of 21.78%.
However, like the "involution" situation faced by the entire new energy industry, wind turbine manufacturers are also facing the problem of "price war". The reporter noted that on May 11, the State Power Investment Group Co., Ltd. announced the bidding results of the ninth batch of centralized bidding in 2024, among which, the 445MW onshore wind power project in Tuquan County, Xing'an League, State Power Investment Corporation, the winning unit price of the wind power machine with tower has been as low as 1471 yuan/KW, and in 2022, the average winning price of the onshore wind power project with tower is still about 2300 yuan/KW.
The price quoted at 1,471 yuan/KW was Yunda Energy Technology Group Co., Ltd. (300772.SZ, hereinafter referred to as "Yunda shares"). According to the financial report information, the company will achieve a total operating income of 3.752 billion yuan in the first quarter of 2024, a year-on-year increase of 7.77%; The net profit attributable to shareholders of listed companies was 70.6596 million yuan, a year-on-year decrease of 4.21%.
The impact of intensified market competition is also reflected in Sany Renewable Energy's financial report: in the first quarter of 2024, Sany Renewable Energy achieved a net profit attributable to shareholders of listed companies of 266 million yuan, a sharp decrease of 44.92% year-on-year.
Operational pressures
Talking about the overall operation in 2023, Fang Meng, financial director of Sany Renewable Energy, said at the performance meeting: "The company's new (fan) hoisting capacity in 2023 will be 7.41GW, a year-on-year increase of 64%, and the market share in the domestic market will be 9.3%, an increase of 0.2 percentage points year-on-year. In 2023, the company's new orders will be 14.1GW, a record high, achieving explosive growth. ”
Behind the explosive growth is the rapid increase in the number of domestic wind turbine assembly machines. According to statistics from the Wind Energy Committee of the China Renewable Energy Society, China's new wind power capacity will be 79.37GW in 2023, a record high, an increase of 59.3% compared with 2022. Among them, onshore wind power added 72.19GW, a year-on-year increase of 62%; Offshore wind power added 7.18GW, a year-on-year increase of 39%.
A practitioner in the wind power industry told reporters that the domestic wind turbine market has entered the era of parity, and the decline in the price of wind power equipment has stimulated the high increase in downstream installed demand; At the same time, the "Administrative Measures for the Transformation, Upgrading and Decommissioning of Wind Farms" issued by the National Energy Administration in 2023 has further promoted the transformation and upgrading of existing wind farms and released the demand of the stock market.
The reporter also noted that in the "Measures for the Management of Wind Farm Transformation, Upgrading and Decommissioning" issued on June 5 last year, it was clearly pointed out that wind farms that have been connected to the grid for more than 15 years or have a single unit capacity of less than 1.5 MW are encouraged to carry out transformation and upgrading.
Although the decline in the price of the whole machine is a good thing for the downstream application market, it is a pressure for wind power equipment manufacturers.
"The company's gross profit margin for wind turbines in 2023 is 15.45%. Affected by the delivery of some new lower-priced orders in the year of delivery, the gross profit margin of wind turbines will gradually decline from the second quarter of 2023. Fang Meng pointed out at the performance meeting.
However, from the perspective of horizontal comparison, Sany Renewable Energy's gross profit margin of 15.45% is still the leading level in the industry. For example, Mingyang Smart Energy Group Co., Ltd. (601615. SH, hereinafter referred to as "Mingyang Intelligent") will achieve external sales of wind turbines of 9.69GW in 2023, and the gross profit margin of sales of wind turbines and related accessories will only be 6.35%, a year-on-year decrease of 11.42 percentage points, in addition, it will even have a net loss of 855 million yuan attributable to shareholders of listed companies in the fourth quarter of 2023.
Regarding the trend of wind turbine prices in the future, Cao Jing bluntly said at the performance meeting that "the current operating pressure of wind power manufacturing enterprises is greater". At the same time, she also said, "In the future, the price of wind turbines may decline with the further promotion of large-scale units, but there is not much room for decline." ”
"Recently, the bidding results of some power generation enterprises in 2024 were announced, among which the average winning bid price of onshore 5MW wind turbines including towers reached more than 2,100 yuan/KW, returning to more than 2,000 yuan, and the price of onshore wind turbines began to return rationally." Cao Jing said.
Fang Meng also said that in the first quarter of 2024, Sany Renewable Energy's comprehensive gross profit margin has rebounded to 19.67%, an increase of 5.3 percentage points from the previous quarter. He emphasized, "The company's 2024 annual fan gross profit margin target will not be lower than 2023." ”
Regarding the phenomenon of "increasing revenue but not increasing profits" in the first quarter of 2024, Fang Meng explained: "Affected by factors such as the Spring Festival and weather, the first quarter of each year is generally the off-season for the industry, and the number of shipments and hoisting is small. Since April, the industry's shipment and installation speed have improved significantly, and the overall shipment volume of the industry in the second quarter is expected to increase significantly compared with the first quarter. ”
In terms of wind farm development and construction, Fang Meng said: "By the end of 2023, the company has 247.6MW of wind power stations, about 100MW will be connected to the grid in the first quarter of 2024, and about 100MW of one wind farm will be sold. Up to now, there are more than 2 GW of wind farms under construction, and it is expected that more than 1 GW of new wind farms will be started and connected to the grid in 2024. ”
At the same time, he stressed that Sany Renewable Energy is currently negotiating a relatively considerable reserve of wind farm resources, mainly distributed in Hunan and Sanbei regions. The company develops wind farms on a rolling basis, implements the strategy of "developing a batch, transferring a batch, and holding a batch", and transfers the wind farms in a timely manner according to the demand-side situation.
"The development, grid connection and transfer of the company's wind farms will enter the rhythm of batch and large-scale 'rolling development' in 2024, and it is expected that the transfer capacity of external wind farms in 2024 will increase to a certain extent compared with 2023." Fang Meng said.
Drivers
At the performance meeting, talking about the future growth drivers of the wind power market, the reporter noted that the management of Sany Renewable Energy focused on three directions, namely expanding overseas markets, focusing on offshore wind power projects and focusing on opportunities for distributed wind power.
On March 25, 2024, the National Development and Reform Commission, the National Energy Administration, and the Ministry of Agriculture and Rural Affairs jointly issued the Notice on Organizing and Carrying out the "Wind Control Action in Thousands of Towns and Villages", which pointed out that during the "14th Five-Year Plan" period, a number of wind power projects will be built in rural areas of qualified counties (cities, districts, banners) with villages as units, with no more than 20 MW per administrative village, and explore the formation of a new model of wind power investment and construction of "village-enterprise cooperation" and a new revenue distribution mechanism of "co-construction and sharing". Promote the construction of a new pattern of wind power development and utilization in which "there is wind power in the village, collective income, and villagers get benefits".
Zhou Likai, secretary of the board of directors of Sany Renewable Energy, pointed out that there is huge space for distributed wind power to be developed in mainland China, and the introduction of this policy will continue to promote the development of distributed wind power, which is expected to further increase the annual installed capacity of domestic wind power.
"Rural distributed wind power mainly focuses on the cost of electricity, and at present, the cost of distributed wind power is significantly higher than that of centralized wind power due to the dispersion of projects. Considering the problem of LCOE, according to the wind resources in various places, units of more than 5MW are generally used in the current models, and the existing mature models can be directly applied. At present, there are many uncertainties in the implementation of rural decentralized wind power, and there are related problems such as land, resources, consumption, and noise at this stage. In the future, after the relevant problems are solved, rural distributed wind power will be a large market opportunity. Zhou Likai analyzes the future opportunities in the distributed wind power market.
In terms of offshore wind power, Zhou Likai said that offshore wind resources are generally better than onshore, coupled with high electricity prices and fewer consumption problems in coastal areas, offshore wind power projects have become a key focus area of the wind power industry.
"Since the beginning of this year, offshore wind power has continued to have good news, from Fujian, Hainan, Shandong and other coastal provinces released in 2024 major project planning, offshore wind power is a key 'hot word', the layout of offshore wind power projects by major energy developers is ready to go, offshore wind power is developing in a deeper, farther and more diversified direction, and offshore wind will be an important contribution to the growth of domestic installed capacity in the future." Zhou Likai said.
However, the reporter of the Economic Observer Network noticed that Sany Renewable Energy started late in the manufacture of offshore wind power equipment, and will only release offshore wind turbine products in 2023.
In terms of overseas business, according to the announcement of Sany Renewable Energy, the company will achieve overseas revenue of 310 million yuan in 2023, achieving a new breakthrough in the overseas export of wind power equipment in Central Asia and South Asia, and the gross profit margin of overseas sales will reach 22.07%, 5.25 percentage points higher than that in China.
According to the statistics of the Global Wind Energy Council, in 2023, 77.6GW of new wind power capacity will be added to the global installed capacity of wind power, 44.7GW of new onshore wind power capacity in China, and 5.1GW of offshore wind power capacity, accounting for more than two-thirds of the total new installed capacity in the world.
According to Fang Meng, in order to promote global business expansion, Sany Renewable Energy has built an overseas team in the form of "Chinese + local", and the overseas team has basically covered the world's major wind power markets.
"Overseas demand will accelerate in the next few years, and the number of orders obtained by domestic enterprises will gradually increase. Moreover, with the reduction of financing costs brought about by the future US dollar interest rate cut, it is expected that the installed capacity of overseas markets will start to grow on a large scale from 2025 or 2026, and Chinese machine manufacturers will gain a larger global wind turbine market share by virtue of their advantages in cost and delivery efficiency. Fang Meng said.
"You can also see that at this stage, all domestic manufacturers are speeding up the layout of overseas markets, (Chinese fans going to sea) we have both the ability and the potential of overseas markets. For Sany Renewable Energy, our company's strategy is globalization, digitalization, and low-carbonization, and we put the globalization strategy in the first place, and the current overseas market situation is relatively good, and we are very confident in the growth of overseas demand market in 2024 and the following years. Zhou Likai said.