Goldwind Science&Technology Co., Ltd. ($002202)

Dear investors, good afternoon. Welcome to join us at Goldwind 2025 Annual Results Earnings Call. Today, we have the executive members. First, Mr. Cao Zhigang, Board Director and President; and VP, Board Secretary and Company Secretary, Ms. Ma Jinru; CFO, Wang Hongyan; and Group VP and GM of Wind Power Industrial Company, Mr. Chen Qiuhua. Today, we have 2 parts in our earnings call. First, Ms. Ma is going to walk us through the industry development, our performance and future outlook in 2025. Then CFO, Wang Hongyan, is going to walk us through the financial results, and then we'll move on to Q&A. First to Ms. Ma.

Thank you. Dear investors, thank you all for joining us today at the 2025 Goldwind Annual Results. First of all, let me introduce the industry in 2025. First, let's look at the global market for wind power in 2025. The new installation is 169.2 gigawatts, up by 37.9%. Onshore, 161 gigawatts, up by 45.1%. Offshore, new capacity of 8.1 gigawatts, down by 30.2%. On the very right side, we can see by country breakdown, China continued to dominate the global installation. In 2025, China's new addition capacity accounts for 3/4 of the global installations. Now back to China. In 2025, the grid connection is 120 gigawatts and the onshore 113 gigawatts and 6.59 gigawatts from offshore wind power. At the end of 2025, China's cumulative grid connection capacity totaled 640 gigawatts, taking 16.4% China's total power mix, while thermal power declined to 39.6%. On the right side, you could see the electricity production. Last year, China used 10,368.2 billion kilowatt hours, up by 5.0% year-on-year and among which we have 1,130 billion kilowatt of wind power representing an increase of 13% year-on-year and penetration rate of 10.9%, which improved year-on-year, but China still lag far behind benchmarking against other countries, EU and U.K. average penetration rate is about 20% and in Denmark, more than 50 years (sic) [ 50% ] for multiple years. Now let's look at the LCOE 2025, you can see that the utilization rate, national average is 1,979 hours, which is a utilization rate of 94.3%. And we could see that Shanghai, Fujian and Chongqing has reached 100%, respectively, in terms of the utilization rate. On the right side, you could see the level cost of offshore globally. Overall, we can see [Audio Gap] are all very advantageous compared to the global average, especially in the last 2 years. For China, we have involution, which is alleviated and the price, especially onshore is definitely back to order. That's why the LCOE onshore is very, very steady and offline offshore, LCOE declined slightly. However, if you look at the global average, especially non-China market because of the supply chain shortage. So in the last few years, the onshore actually globally is trending up. So if you look at China's LCOE, both onshore and offshore are both quite advantageous. Let's now look at the tender and bidding. In 2025, domestic public tender market totaled 121.2 gigawatts, down by 26%, where you can see during 14th 5-year plan, we definitely have seen very spike in growth. And onshore, we have 112 gigawatts and offshore 9.14 gigawatts. By region, more than 70% originates from northern part of China. On the right side, you could see the average bidding price per month. You could see the price is very stable, trending up month by month. On Page 7, you could see the policy support from Chinese government issued in 2025, generally speaking, against the dual carbon goals, the NDRC, NEA has jointly issued a number of policies, deepening the market-oriented reform of on-grid power tariffs for new energy, and we definitely promote green, low-carbon transformation, enhancing the quality development of new energy development in 4 parts. We have listed a number of related policies. For example, on February 9, the NDRC and NEA's notice on deepening market-oriented reform, I will spare the details here. So against that industry backdrop, let's check out on Goldwind's performance. In 2025, our performance, especially new installations has been #1 in China market and for 15 years and cumulative 4 years, the #1 globally. And we have 165 gigawatts cumulative installation worldwide in 42 countries and regions. We have 8 R&D centers, and we participated in 600 standard setting globally. And in 4 parts, I'm going to share with everybody our business performance. All in all, Goldwind performance has seen robust growth and the particular financial results will be shared by Mr. Wang, Hongyan, our CFO. So let me just talk about the top line and our performance. First of all, first segment, the sales of WTG in 2025, our external sales capacity is 26.626 gigawatts, up by 65.9% and the proportion below 6 megawatts totaled 3,126 megawatts totaling 11.7% and from 6 megawatts to 10 megawatts totaled 18,818 megawatts, taking 70% and above 10 megawatts totaled 4,682 megawatts, taking 17.6%. And of course, we definitely have 39.5 gigawatts of signed contracts, 11 gigawatts of successful bid and 50.5 gigawatts of external order backlog. So company's total order backlog in 2025 year-end is 53.7 gigawatts, and you can definitely see the additional 3.2 gigawatts of order was for our own wind farm. We also explored the global market. Our business is now in 6 continents, 49 countries. Our installation is in 42 countries, but our orders definitely spread across 49 countries by year-end of 2025. Cumulative installation in overseas market is 12.599 gigawatts in Australia, South America, we have exceeded 2 gigawatts and installation in Europe, North America and Africa has exceeded 1 gigawatts and in Asia exceeded 3 gigawatts. At the year-end, company's overseas external backlog was 9,270.17 megawatts. Overseas operating capacity totaled 433 megawatts. Let's now look at the wind power generation and grid connection. Our added attributable grid connection capacity was 2,497 megawatts and a total of 588.45 megawatts were sold at home and abroad. At the year-end, company's attributable grid connection totaled 9,951 megawatts, 39% domiciled in Northwestern China, 24% in Eastern China, 16% in North China and 9% in Northeastern region and 8% in Southern China. At the year-end of 2025, attributable under construction wind capacity totaled 2,521 megawatts. On the right side, you could see the by region breakdown. Let's now look at the utilization. On the left side, you can see our self-run wind farm recorded 2,290 hour utilization, which is 311 hours higher than national average. On the right side, you could see the wind power service, thanks to our economy of scale and experience of O&M, you can see by the year-end of 2025, our under operation capacity reached over 50 gigawatts, up by 26% year-on-year. We definitely have valued SDG. In 2019, we made the previous sustainable development plan, and we definitely focused on green, environmental-friendly operation, compliance, sustainable industry chain and sound working environment and harmonious community relationship every year. We set goals and KPIs to work on these 5 fronts. Last year, we have delivered a fantastic job on STS (sic) [ SDG ] especially on the goals set by 2025. For example, in terms of compliance and honesty, we have been achieving Class A in 2025 information disclosure, quality rating from Shenzhen Stock Exchange, and we also have a complaints and reporting closing rate up to 100%. You definitely can see the greenhouse gas emission per megawatt reduced by 55.1% compared to 2020 and hazardous waste generated per megawatt of wind turbine manufactured is 78.1% lower than 2020 and water use intensity for production operation is 28.8% lower than 2020. We also have maintained carbon neutrality at the operational level in 2025 and 99% of our global production operations will be powered by green electricity and self-generated market-traded green power accounting for 57.2% of our total electricity consumed. And in 2025, we also delivered great sustainability industry chain goals. For Goldwind, we believe to better evaluate our social responsibility means providing better quality service and products. Our principal products is WTG. By the end of last year, we have 12 -- evaluated 12 of our WTG's lifespan, and we also had received the international product lifespan accreditation. You could see that the carbon intensity per kilowatt hour is pretty low, which is about 3 grams. So generally speaking, it's usually at more than 800 grams. So we're much lower than the traditional competitors. Our other products are also going through carbon footprint accreditation and evaluation. We also started the green industry chain, recycling of our turbines to better deliver our corporate social responsibility. Now over to you, Mr. Wang Hongyan to walk us through our financial results.

Well, respected shareholders, good afternoon. My name is Wang Hongyan, CFO of Goldwind Science and Technologies, and thank you all very much for your sustainable interest and support to the company. So in the next 10 minutes of time, I'm going to report to you the financial results of the company in financial year 2025. As usual, I'd like to analyze all index, especially the profitability, the segment results and then solvency position as well as our cash flows and balance on cash. So starting from Page 1, we can see, as usual, the gray here represents last year and the dark blue reports the reporting period. Let's now check out on Page 18, which is the consolidated profitability index, which involves 4 key indexes on the left side, you could check out the revenue of the company in financial year 2025. You could see in gray and blue representing our revenue in 2025, our revenue CNY 73 billion, up by CNY 16.3 billion, mostly as a result of WTG market demand, sales and our business execution. On the right side, you could see the profit margin. Also, you could see quarter-by-quarter profit margin performance in 2025. Consolidated profit margin is 14.18%, up by 0.38 percentage points. And the profit is up by CNY 2,774 million. This is definitely as a result of the good strategy, product mix optimization for WTG business, which definitely helped us to improve our revenue. On the left side, you could see the attributable net profit totaled CNY 2,774 million, up by 49.12%. It is a result of how we improve our cash making ability, profit margin improvement and expenses reduction. On the very right corner, you could see the weighted average return on equity, ROE. In 2025, our weighted ROE is 7.08%, up by 2.17 percentage points, mostly as a result of growing revenue and optimization of our core equity. You could see that the weighted average ROE is improving year-on-year. So on consolidation level, in 2025, our revenue, profit margin, net profit and weighted average return on equity have all been improved on basis of 2024, which definitely is a result of our budget and our strong execution of our strategy. On second part, in Page 19, I'm going to report on our segment results as Ms. Ma has just introduced. For WTG manufacturing and sales, revenue grew dramatically, especially the offshore business has increased, which optimized the profit margin and total sales. The second part is the wind farm development. The revenue and profit margin year-on-year also changed. One slightly declined and the other increased. So you can see that the revenue from the wind farm development has definitely decreased, but the profit margin improved. If you look at the third segment, wind power service and other businesses, which is pretty flat versus 2024. So you can see our budget is well executed and pretty aligned with the business performance. Moving on to Page 20, which is the operation index. On left side, you can see days of trade receivables, 3 improvements, number one: At the end of 2025, the balance is CNY 23 billion (sic) [ CNY 32 billion ] accounting for 19% of our total assets improved by 1 percentage point. And the days of receivables versus our total assets also improved and also the days of trade receivables was 158 days, much improved on basis of 2024. So you could see that the 3 improvements in all these data. On the very right side, you can see days of inventory and contract assets. At the end of 2025, we have inventory and contract assets totaled CNY 17,267 million, taking 10% of total assets and the days of inventory and contract assets was 97 days, improved by 25 days. So if you look at the operating efficiency of inventory and contract assets, it's much improved because of our delivery, lead time improvement and precise execution of our strategy. Now let's move on to Page 21 on solvency. On the left side, you could see the interest-bearing debt. we can see from the pie chart that in 2025, the absolute value of the interest-bearing debt has declined, which in 2025, from Q1 to Q4 has been improved. And in the same time, the internal structure of the interest-bearing debt has been optimized, which helps the company to reduce our financing cost, which definitely created the most preferential financing cost for the company. At the same time, if you look at the total credit granted also improved significantly, which laid a solid capital guarantee for our future development. On the very right side, which is very meaningful, it's on asset liability ratio. In 2025, our ALR down by 0.3 percentage point, which is by now the largest reduction ever since we were listed. That reflects our optimization of our solvency position on innovative strategy and execution. It also reflects the financing strategy of the company is highly robust and healthy. In 2026, we will continue to improve the operational efficiency of our capital so that the asset liability ratio will go down, making sure we have a very balanced and healthy financial position. On the very last part, we could see the cash and net operating cash flow. On the very left side, you could see the cash and total assets. In 2025, our cash balance versus the total assets has been much improved. This is a result of our lean management of our capital. On the very right side, you could see the net operating cash flow. In 2024 throughout 2025, our net operating cash flow is very aligned with the seasonal unusuals. And whether negative or positive, it is aligned with the industry's performance. But you can see 2025, the operating cash flow fluctuations actually narrowed down, which means the stability of our cash has improved. This definitely safeguards the security of our cash, but also improved the operational efficiency of our company's cash balance. So from cash flow results, I can see that the growth rate of our net operating cash is outperforming the revenue growth and attributable net profit in 2026. We'll continue to launch the lean management of our cash capital to make sure we have stable, healthy, sufficient cash balance. That's all for me on 2025 financial results.

Great. Let me now take over from Mr. Wang to talk about the outlook. For global wind power outlook, here, we definitely quote from IEA and GWEC's forecast. Simply said, IEA believes that from 2025 to 2030 period, the new installed capacity globally will reach 4,600 gigawatts and cumulative new onshore will be 732 gigawatts, up by 45%. And on the right side, you see GWEC's forecast. They believe from 2024 to 2029, the CAGR for global offshore wind capacity addition will be 28%. And from 2029 to 2034, the CAGR is going to reach 15%. In China, in the 15th Five-Year Plan, the government outlined the goal of accelerating development of a clean, low-carbon safe and efficient energy system. And of course, by 2030, nonfossil energy will account for 25% of total energy consumption and Chinese government also talk about the local development and utilization of distributed energy and plan for green hydrogen, ammonia and methanol, building new power systems, enhancing the complementary mutual support and safety resilience of the power system. On the right side, you could see China's key wind power market. This year is the beginning of the 15th Five-Year Plan. Last year, the company has looked at the global industry development and the industry trends to revise our new 5-year plan. We focus on 4 areas, especially green environmental operation, compliance and giving back to the community. We also drafted the goals for all these fronts. Let me give you a few examples. For example, on green environmental operation, we'll make sure we have a carbon neutrality on operational level. By 2030, we hope that the greenhouse gas emission per megawatt will be declining by 20%. And by 2031, 100% of our global production operation will be powered by green electricity. By 2030, the carbon emission intensity of core components of our generator units were down by 8% with 2025. We also have other goals like recyclable turbines and 100% construction waste and packaging materials recycled. All in all, Goldwind has really value ethics and compliance and looking for sustainable development. In the last few years, the company has definitely delivered excellent job on ESG fronts. We definitely have been highly recognized by our stakeholders in and out of the industry. During the 15th Five-Year Plan, Goldwind has set ambitious ESG goals to better respond and protect our stakeholders' interest. That's all for me. Thank you all. [Statements in English on this transcript were spoken by an interpreter present on the live call.]