Sinolink: Short-term pressure under high base of wind power, optimistic about the performance turning point in the second half of the year.

Sinolink has released a research report stating a positive outlook for sector performance in the second half of the year, driven by a triple resonance of overseas orders, bidding demand, and segmented market demand. The report sequentially recommends the following based on the certainty of profitability release: 1) benefiting from the high prosperity of Europes offshore wind construction, the upgrade of overseas business in the pile segment, as well as components and submarine cable segments with potential order opportunities; 2) marginal cost pressure alleviation is expected to bring a definitive improvement in manufacturing profitability in the second half of the year, with the current valuation being extremely low for the complete machine segment. Sinolink's main points are as follows: Demand slowdown coupled with cost pressure has put short-term profit pressure on the sector. According to statistics from the SW Wind Power Equipment caliber, the wind power sector achieved revenue of 121.6 billion yuan in the first half of the year, a year-on-year increase of 12.1%; it recorded a net profit attributable to the parent company of 3.53 billion yuan, a year-on-year decrease of 25.6%. Among them, in Q2 2026, the wind power sector achieved revenue of 66.7 billion yuan, a year-on-year decrease of 2.9%. Due to the high base brought by the "531 rush installation" in 2025, the revenue growth rate of the sector slowed in Q2; the net profit attributable to the parent company in Q2 was 1.39 billion yuan, a year-on-year decrease of 57%, mainly affected by cost fluctuations, exchange losses, and a significant year-on-year decrease in the scale of power station transfers in the complete machine segment. Since June, domestic wind power installations have shown a significant turning point, entering the regular installation peak season in the second half of the year, combined with gradually easing upstream raw material cost pressures, we are optimistic that the sector's revenue and profitability will gradually recover in the second half of the year. Leading complete machine companies are driving the trend of improving profitability for wind turbines, with overseas business maintaining high growth rates. In the first half of the year, there was some differentiation in the gross profit margin trends of the leading complete machine manufacturing segment, with Goldwind leading the margin improvement, primarily benefiting from fewer low-priced bids and more high-priced bids; as the remaining leading companies clear their orders from previous low-priced bids, a notable turning point in manufacturing gross margins may also be seen in the second half of the year. In the first half of the year, the overseas business of the complete machine segment continued to accelerate, with Goldwind, SANY, and Yunda's overseas wind turbine revenues increasing by 39%, 300%, and 426% year-on-year, respectively. Due to rising transportation costs and low-priced order deliveries, SANY and Yunda's overseas profitability faced short-term pressure, while Goldwind benefited from a well-structured overseas delivery market in the first half, maintaining a high gross margin. From January to August, domestic complete machine companies signed approximately 18 GW of overseas contracts, a year-on-year increase of 10%, with overseas orders remaining highly prosperous. We are optimistic about the gradual expansion of overseas and offshore wind businesses forming long-term growth potential in the complete machine segment. Risk warnings: Risk of commodity price fluctuations; downstream installations falling short of expectations; policy risks.