Mingyang Smart’s net profit in the first quarter soared by 5 times. Under the background of the price war of wind turbines, what will happen to the company’s future profits?
On the evening of April 7, Mingyang Intelligence disclosed the forecast for the first quarter of 2022. It is expected that the net profit attributable to the parent from January to March 2022 will be 1.3-1.55 billion yuan, a year-on-year increase of 1.04-1.29 billion yuan, or an increase of 408%- 505.7%. It is expected to achieve non-net profit of 1.29-1.54 billion yuan, a year-on-year increase of 440.93%-545.76%, and the overall performance has far exceeded market expectations.Wall Street News & Wisdom ResearchNext, we will analyze for you,What is the story behind the surge in performance? What aspects need attention?
The increase in orders on hand and the increase in the scale of turbine deliveries are the main reasons
Mingyang Intelligent was established in 2006 and listed in 2019. It is the leading manufacturer of offshore wind power generators, focusing on the R&D and production of large-scale units. At present, the models have covered 5.5MW, 6.45MW, 7.25MW, 8.XMW, 11MW and other products. . Since 2022 is the first year of sea wind parity, offshore wind power will usher in a rush to install in 2021. The newly installed capacity of offshore wind power in my country will reach 16.9GW in the whole year, which is four times the installed capacity of about 4GW in 2020.As the leader of Haifeng, Mingyang Smart has benefited from the rush to install in the industry, and its performance is naturally outstanding. According to its disclosed 2021 performance forecast, it achieved a net profit of 3.319 billion yuan attributable to the parent, a year-on-year increase of 141.56%, and the proportion of Haifeng’s shipments also increased.。
According to the company’s first-quarter earnings pre-increase announcement disclosed yesterday, the main reason for this pre-increase in performance isDue to the increase in the company’s orders on hand and the increase in the company’s delivery scale, the company’s operating income increased year-on-year. In 2020, the company has 13.88GW of orders on hand, 8.25GW of onshore orders, and 5.63GW of offshore orders; as of Q3 2021, the company’s orders on hand reached 18.26GW, and it is expected to exceed 20GW for the whole year, an increase of about 44% year-on-year. In terms of order structure, more than 60% of the models are above 4MW, and the large-scale unit rate is leading domestically. In terms of delivery volume, the company will deliver 5.66GW in 2020, over 6GW in 2021, and is expected to deliver 8GW in 2022, a year-on-year increase of over 33%.Wisdom researchthink,Last year, due to the rush to install the sea breeze, the company’s orders were sufficient, with a year-on-year increase of more than 40%. This year, the hot trend of sea breeze has not diminished. It is reasonable for the order to perform well in the first quarter.。
Under the downward trend of wind turbine prices, is high profitability sustainable?
Mingyang Intelligence has developed rapidly in recent years, and its performance has continued to grow steadily. In particular, 2020 and 2021 are special. 2020 is the last year of subsidies for onshore wind power, and 2021 is the last year of subsidies for offshore wind power. Therefore, in the past two years, Landwind and Seawind take turns to rush to install, which provides an industry foundation for the company’s performance growth.This year’s industry volume will be smaller than last year. This year, Haifeng mainly depends on the bidding volume, because the delivery cycle of the winning wind turbine is about 1-3 years. This year’s bidding is the installed capacity of the next year. According to the “14th Five-Year” offshore wind power plan of each province, it is expected to exceed 60GW, so this year is expected to be the starting point for the prosperity of bidding in the next few years. Therefore, from an industry perspective, it provides strong support for the company’s future growth of Haifeng’s business.
The wind power industry is a cyclical industry, but after parity, cost reduction and efficiency enhancement are more and more important, and the wind power industry has begun to move forward like a growth.And whether it is land breeze or sea breeze, large-scale, cost reduction is the trend. Since the second half of last year, the price war between wind power manufacturers has intensified. The price of Landwind used to be as high as RMB 4,500/KW, and the lowest price has fallen below RMB 2,000/KW. The price of the sea breeze has also dropped from about 6,000 yuan/KW to about 4,000 yuan/KW. Last year, the price war between OEMs was fierce, but judging from the results announced by Mingyang Intelligence, the impact on profits last year was not great.Wisdom research thinksMainly becauseThe cost reduction ability of leading enterprises is stronger than that of the second and third line, including the coordinated cost reduction of the supply chain and the large-scale technology cost reduction. In addition, the price of wind turbines is not completely comparable, and it also depends on the company’s resources and differences in models. Third, the company’s bidding focus this year will still focus on Seawind. Compared with Landwind, Seawind has higher barriers and technical requirements. Although the price of offshore wind turbines will continue to drop, the competition is not as fierce as Landwind.
Overall, the Wisdom study believes that,Under the background of the price war of OEMs, the large-scale wind turbines, and the impact of upstream raw material price increases, the gross profit margin of OEMs is bound to be compressed.However, it still depends on the model of the specific company. For example, in addition to the cost reduction ability of Mingyang Intelligent, the driving force of the company’s future performance growth mainly depends on the sea wind. At the same time, the company is located in Guangdong, which has a geographical advantage, because Guangdong is a large province of offshore wind power industry clusters. And the specific subsidy policy has been released. The subsidy per kilowatt from 2022 to 2024 is 1,500 yuan, 1,000 yuan, and 500 yuan, respectively. Under the multiple advantages of cost advantage, location advantage and the development trend of Haifeng, the company’s performance has a high probability of maintaining high growth.
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