Zhongjin: Expected that the domestic wind power installed capacity in 2025 is expected to achieve a historic high.

CICC released a research report stating that as we approach 2025, the end of the 14th Five-Year Plan, the domestic wind power industry is expected to achieve a historical high in terms of newly installed capacity. By reviewing the installation rush periods in 2015 and 2020-2021, it is expected that the similarities and differences between 2025 and historical rush years exist. Overall, there is optimism regarding the trend of increasing profitability in various sectors of the industry chain in 2025. Review of the Rush Years in 2015 and 2020-2021 Both historical rush periods were characterized by the end of the five-year plan and the reduction/cancellation of electricity price subsidies. The industry achieved historically high levels of new installed capacity, with the elasticity of industry chain prices and profits being significantly higher in the 2020 rush compared to 2015, with greater profit elasticity in the wind turbine components sector compared to the whole turbine sector. Outlook for 2025 at the end of the 14th Five-Year Plan CICC predicts that in 2025, the domestic wind power industry's new installed capacity is expected to reach 110-120GW. This rush is expected to have minimal policy impact, and the demand for new installed capacity in 2026 may continue. Under conservative and optimistic scenarios, offshore wind power is expected to change the construction status after three years of low performance since the 2021 rush, with an additional installed capacity of 14/17GW. The mismatch between onshore wind power installed capacity and output is still apparent in 2025, with offshore wind power being the key to increasing the manufacturing output of the domestic wind power industry in 2025. The overall price elasticity of the industry chain may be limited, possibly lower than in 2020. However, there is a trend of increasing profit margins in various sectors, driven by factors such as product structure optimization, lower upstream raw material costs, reduced unit fixed costs driven by shipment growth, and slight price increases in some sectors. Recommendations: 1) Beneficiaries of the increasing offshore wind power in China include Ningbo Orient Wires & Cables (603606.SH), Jiangsu Haili Wind Power Equipment Technology (301155.SZ), Titan Wind Energy (002531.SZ); 2) Companies in the whole turbine sector with a trend of continuous profit recovery include Goldwind Science & Technology (002202.SZ), Windey Energy Technology Group (300772.SZ), Sany Renewable Energy (688349.SH), Ming Yang Smart Energy (601615.SH); 3) Companies benefiting from lower raw material costs and reduced unit fixed costs include Jinlei Technology (300443.SZ), Riyue Heavy Industry (603218.SH); 4) Companies continuously driven by exports include Dajin Heavy Industry (002487.SZ), Shanghai Taisheng Wind Power Equipment (300129.SZ) Risk Factors Lower-than-expected industry demand, significant rebound in raw material prices, and increased industry competition.