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2013 Interim Results
SZEx Stock Code: 002202 HKEx Stock Code: 2208
Agenda
Section 1 Industry Overview
Section 2 Business Performance
Section 3 Financial Performance
Section 4 Company Outlook
Page 1
China Wind Outlook Cautiously OptimisticAlthough new installations remained slow in 1H2013, the full-year 2013 is still expected to improve relative to full-year 2012
Source：Actual and cumulative installations: China Wind Energy Association; Target installations: China Wind Energy Roadmap 2050.
China Annual Installed Capacity (GW)
Page 2
Most industry participants are cautiously optimistic that 2013-15 annual installations will exceed 2012 installations of 13 GW.
• According to preliminary data from the Chinese Wind Energy Association, 1H2013 installations were 5.5 GW, level with 5.5 GW in 1H2012.
• Although 1H2013 was weak, wind farm development activity is expected to accelerate in 2H2013.
3.36.2
13.8
18.9 17.6
13.0
5.5
5.8 12.125.8
44.762.4
75.3
2007 2008 2009 2010 2011 2012 2013E 2014E 2015E
Actual Installations Forecast Installed Capacity
Cumulative Installed Capacity Forecast Cumulative Capacity
12th Five-Year Plan Targets 100 GW by 2015
5.5 1H12
5.5 1H13
Large Pipeline of Wind Farm Projects in ChinaLarge-scale project in Hami, Xinjiang, was added since approval authority was decentralized to the provincial level, bringing approved projects to over 90 GW
Source: Company estimates.
Wind Projects Approved for Construction Under China’s 12th 5-Year Plan (GW)
• A large-scale wind farm project was approved in Hami, Xinjiang, in July 2013, after authority was delegated to the provincial governments in May 2013, bringing total approved projects to 90.4 GW.
• Goldwind expects developers will continue to build the “three batches”, even now that approval authority has been decentralized to the provincial government level.
• Goldwind estimates that nearly 60% of projects have not yet been tendered or begun construction.Page 3
90.4 GW Proposed Projects
26.8 GW 25.8 GW
28.7 GW
9.0 GW
First Batch July 2011
Second Batch March 2012
Third Batch March 2013
Other ApprovedOct '12 - Jul '13
Northwest
North China
Southwest
East China
South China
Central China
Northeast
Inner Mongolia
75%
Tend
ered
39%
Tend
ered
11%
Tend
ered
33%
Tend
ered
3.0 Gansu
6.0 Hami
Due decentralized approval authority and an ample project pipeline, the project approval
process is no longer an obstacle to development.
Public Tenders Double in 1H2013Public tenders increased 2x in 1H2013 versus 1H2012, suggesting a stronger near-term outlook for the wind industry. However, activity is still lower than in 1H2011.
Source: Company estimates.
Quarterly Domestic Public Tenders (GW)
Page 4
July 2011: 1st batch26.8 GW
March 2012: 2nd batch16.8 GW
3Q12: Additional projects6.8 GW
4Q12: Additional projects5.2 GW
March 2013: 3rd batch28.0 GW
8.4
3.9 3.0
5.5
2.2 2.2 1.4
2.5 3.8
5.0
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
1H11: 12.3GW
1H12: 4.4GW
1H13: 8.8GW+100% vs.1H12
- 64%vs. 1H11
China Policy Update – Recent DevelopmentsRecent announcements supportive of wind power include prepayment of the supplemental tariff and wind project approval decentralization
Source: Government announcements. Page 5
NEA announced that it’s drafting the final version of the renewable portfolio standard, setting requirements for renewable power consumption by province starting in 2015.
15% 8%10% 4% 2%
Renewable Portfolio Standard
Proposed renewable power consumption quota:
China issued RMB 14.8 billion of advance payments to provinces for the supplemental tariff covering wind, solar, and bioenergy power. The largest amount, RMB 9.3 billion, was for wind power. China’s Ministry of Finance has issued a list of renewable energy projects covered by the supplemental tariff, including 1,134 wind projects with 63.8 GW of capacity. Advance payment of the supplemental tariff is expected to improve the liquidity of wind farm operators.
Supplemental Tariff
On May 15th 2013, the State Council announced the decentralization of wind project approval authority from the NDRC to local governments.
Approval Decentralization
Improving Grid Bottlenecks
In March 2013 the NEA issued a notice calling for relevant state agencies and energy corporations to use wind power consumption and utilization a key performance indicator.
China Grid UpdateTwo of 17 transmission projects under 12th 5-year plan have been completed and may begin operation this year. Three more should be completed next year.
Source: Government announcements. Note: Transmission routes are approximate. Page 6
Key Planned Transmission Lines3 Horizontal - 3 VerticalOther Key Transmission LinesUnder construction
Scheduled to Start 2013Approval Expected 2013
137 GW transmission capacity planned for construction through 2015, however the schedule for
completion is still not clear.
Completed
Source: China Electricity Council，China Renewable Energy Engineering Institute, China National Renewable Energy Centre.
Wind Power Utilization Improved in 1H13China’s wind power utilization improved as more wind power was accepted by the power grid. Wind equipment utilization improved 9% compared to last year.
China Average Wind Power Utilization Rate (Hours)
2,077 2,0471,875 1,893
1,010 1,101
2009 2010 2011 2012 1H2012 1H2013
Wind utilization improved during the first half of 2013 due to:
• Growth in national power demand encouraged higher wind power consumption at the provincial level;
• Better thermal power peaking capability allowed for better utilization of wind power.
National wind curtailment rate: 12% 10%
Page 7
Agenda
Section 1 Industry Overview
Section 2 Business Performance
Section 3 Financial Performance
Section 4 Company Outlook
Page 8
Goldwind Product LineOur next generation of wind turbines are designed to meet demand in low-wind, coastal and offshore markets
Source: Company filings.
Low
-Win
dO
ffsh
ore
Suit
abili
ty
Strong domestic demand for turbines that perform well in low wind speed
China targets 5 GW of offshore installations by 2015. PMDD well suited for offshore.
Products specialized for challenging environments continue to drive sales
Product Platforms 1.5 MW 2.5 MW 3.0 MW
Rotor Diameters (m) 70, 77, 82, 87, 93 109, 112, 121 121
Low Wind SpeedClass IIIB: 87/1500
Ultra-Low Wind SpeedClass S: 93/1500
Medium Wind SpeedClass IIA: 109/2500
Low Wind SpeedClass IIIA: 112/2500Class IIIB: 121/2500
Low Wind SpeedClass IIIB: 121/3000
• Low temperature• High temperature• High altitude• Low wind speed• Ultra-low wind• Coastal
• Coastal • Coastal & Intertidal• Offshore
• Coastal & Intertidal• Offshore
• Low wind speed• Coastal• Offshore
• Low wind speed• Coastal• Offshore
Status
Installed (MW)
Commercial Commercial In Prototype
12,741 MW 540 MW 18 MW
Page 9
87/1500Musselshell,
Montana, USA
6.0 MW
TBD
• Offshore
In Development
-
• Offshore
Goldwind leads domestic wind marketDespite China’s challenging competitive environment, Goldwind leads the domestic market by delivering high quality and cost-efficient products and services
China Market Share
Page 10Source: Chinese Wind Energy Association.
2012 1H2013 (Preliminary)
Goldwind19.5%
United Power15.7%
Sinovel9.3%
Ming Yang8.7%
Xiangtan6.9%
Shanghai Electric
6.3%
Envision4.2%
Gamesa3.8%
Dongfang Electric
3.6%
Vestas3.2%
Other18.8%
Goldwind23.3%
United Power14.6%
Ming Yang, 10.1%Xiangtan
9.3%
Shanghai Electric
8.5%
Sinovel, 7.1%
Hai Zhuang5.7%
Envision 4.5%
Gamesa2.5%
Dongfang Electric
2.4%Other11.9%
Market share is based on installations, not sales which are realized upon delivery. Goldwind installed 1,280 MW during 1H13 or 23.3% of market share in 1H13, versus 19.5% in 2012.
First half market share data may not be representative of full-year performance.
Wind Turbines Sales VolumesDespite lingering weakness in domestic wind equipment demand during the first half of 2013, Goldwind maintains a positive outlook for full-year 2013
Source: Company filings.
Realized External Sales Volumes (MW)• Realized external sales reflected
weak demand in the domestic wind market during the first half of 2013.
• Realized external sales volumes decreased 8.2% to 662 MW in 1H2013 from 721 MW in 1H2012.
• Large-capacity units (2.5 MW and 3.0 MW) represented 17% of external sales in 1H2013, up from 5% in 1H12.
Page 11
854 444 154
519
1,592
3,851
2,882
2,216
549
3 >
224
368
<113
1,373
2,036
4,007
3,106
2,583
1H2013662
2008 2009 2010 2011 2012 1H13
2.5 MW & 3.0 MW1.2 MW & 1.5 MW750 kW
1H2012721
1H20111,211
Average Domestic Public Bidding Price for 1.5 MW units (RMB/kW)
• Average domestic public bidding price for 1.5 MW units has returned to RMB 3,800-3,900 per kW
• Domestic ASP widely expected to remain stable or increase in the near-term
Goldwind 1.5 MW Achieved Significant PremiumGoldwind commands a premium in the domestic market due to superior quality, performance, reliability and services
Note: Data include VAT and excludes bids from foreign manufacturers. No public bidding in July 2012.
Source: Internal company estimates.Page 12
Dec-103,950
Mar-113,785
Jun-113,615
Sep-113,816
Dec-113,711
Mar-123,744
Jun-123,747
Sep-123,762
Dec-123,801
Mar-133,788
Jun-133,925
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13
Average Goldwind
Backlog Strong at 8,089 MegawattsDue to a high level of public tenders during the first half of 2013, Goldwind’s backlog increased substantially
Source: Company filings.
Wind Turbine Order Backlog (MW)
Page 13
• Goldwind reported a total backlog of 8,089MW as of 30 June 2013, up 5.7% from 7,655 MW as of 31 March 2013.
• Backlog under final contract of 4,550 MW represented 56% of the total backlog. Successful bids represented the remaining 44%.
2,765
3,9314,400
4,839 5,017
4,0864,576 4,550
3,816 2,397 1,877
2,967 2,564
2,515
3,0793,539
6,580 6,327 6,277
7,806 7,581
6,600
7,6558,089
31 Dec 2010 31 Dec 2011 31 Mar 2012 30 June 2012 30 Sep 2012 31 Dec 2012 31 Mar 2013 30 June 2013
Successfully bidUnder final contract
Percent 1.5 MW73% 79% 77% 82%
Backlog Aging AnalysisA large majority of Goldwind’s contracted backlog dates from 2011 or later
Source: Company data.
Backlog Under Final Contract According to Year Contract Signed
Page 14
• 92% of the 4,550 MW of backlog under final contract as of 30 June 2013 was signed in 2011-2013.
• 8% of contracted backlog dates from 2009 and 2010.
• Project delays are most often due to lack of grid connection agreement.
92%
2009 20092010 2010
2011
2011
2012
2012
2013
2012-12-31 2013-6-30
4,550 MW
4,086 MW
Backlog by LocationGoldwind’s domestic backlog is particularly strong in China’s Northwest and North regions, where curtailment rates have improved
Page 15
Goldwind’s Total Backlog by Location
• Goldwind’s backlog is concentrated in provinces with acceptable levels of wind power utilization, such as Shanxi in North China and Xinjiang in Northwest China.
• Wind farm development has increased in Hami in anticipation of 8 GW of newly installed transmission capacity from South Hami, Xinjiang to Zhengzhou, Henan.
Source: Company data. Note: The backlog includes Goldwind’s backlog for internal sales and Vensys’ backlog.
Over 60%
Xinjiang
Northwest Ex. IM
North China
Inner Mongolia
Northeast South China
International Other China
Xinjiang
International Backlog AnalysisGoldwind’s international backlog is located in both mature and growth markets, such as Europe, South America, and Australia
Page 16
• Goldwind’s international backlog was 361 MW as of 30 June 2013, compared to 221 MW as of 30 June 2012.
• International contracts represent 7.9% of Goldwind’s backlog under final contract.
International Backlog by Region (MW)
Source: Company data. Note: The backlog includes Goldwind’s backlog for internal sales and Vensys’ backlog.
Total = 361MW
129
10089
44
South America Europe Oceania Asia
Agenda
Section 1 Industry Overview
Section 2 Business Performance
Section 3 Financial Performance
Section 4 Company Outlook
Page 17
Annual & Semiannual Financial ResultsRevenues decreased 6.5% in 1H2013 compared to 1H2012 due to lower wind turbine volumes. Gross margin increased and net profit achieved reasonable level.
Source: Company filings. Annual data are in accordance with IFRS. Net profit is net profit attributable to owners of the company.
Revenues (RMB millions) Gross Profit (RMB millions)
Net Profit (RMB millions)Gross Margin (%)
Page 18
Annual Semi-annual Annual Semi-annual
Annual Semi-annual Annual Semi-annual
3,808 6,305 5,172 3,451 3,227
10,667
17,475
12,756 11,225
2009 2010 2011 2012 1H13
923 1,552
1,085 459 599
2,758
4,021
2,0571,592
2009 2010 2011 2012 1H13
538 773
425 72 93
1,208
1,517
182
81
2009 2010 2011 2012 1H13
24.2% 24.6%
21.0%
13.3%
18.6%
25.9%23.0%
16.1%14.2%
2009 2010 2011 2012 1H13
Quarterly Revenues, Gross Margin, and Net Profit2Q13 revenues and gross profit improved due to stronger wind turbine deliveries
Source: Company filings. Quarterly data are in accordance with PRC GAAP. Net profit is net profit attributable to owners of the company.
Quarterly Revenues (RMB millions) Quarterly Gross Profit (RMB millions)
Quarterly Net Profit (RMB millions)Quarterly Gross Margin (%)
Page 19
1,856
3,339
4,226
3,423
1,700 1,784
2,463
5,378
951
2,295
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
411
692651
374
186
295
407
852
170
443
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
22.1%20.7%
15.4%
10.9% 11.0%
16.5% 16.5% 15.9%17.9%
19.3%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
206219
190
-8
6
66
-34
115
3260
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Business Segment ResultsNon-manufacturing business segments provide diversification and growth
Notes: Financial data are in accordance with IFRS.
Gross Profit (% of total GP)Revenues (RMB millions)
• Non-manufacturing segments increased to 12.2% of revenues in 1H2013, up from 7.6% in 1H2012.
Page 20
• Non-manufacturing segments represented 24% of gross profit in 1H2013, up slightly from 23% in 1H2012.
95% 96%92%
87%
77% 75%
2%> 1%> 4%5%
12%4%
3%> 3%> 4% 8% 11%20%
2009 2010 2011 2012 1H12 1H13
WTG R&D, Manufacturing and SalesWind Power ServicesWind Farm Investment, Development and Sales
215 293 363 392
162 208 104
178 139 252
102186
2009 2010 2011 2012 1H12 1H13
WTG R&D, Manufacturing and Sales
Wind Power Services
Wind Farm Investment, Development and Sales
10,347
17,005
12,25410,581
3.0% 2.7%3.9%
5.7%
Perc
ent
of T
otal
2,833
12.2%
7.6%
3,188
572.2 585.9
740.0 605.3 558.3 522.0
1,029.6
1,252.9
31 Dec 2011 30 Jun 2012 31 Dec 2012 30 Jun 2013
Attributable Installed CapacityAttributable Under Construction Capacity
Wind Farm Development and SalesGoldwind stepped up its investment in wind farm development
Source: Company filings.
Wind Farm DivestituresAttributable Wind Farm Capacity (MW)
• Goldwind sold its ownership stake in two wind farms with 134.7 MW of attributable capacity during 1H2013.
• Total installed wind farm capacity was 981.5 MW and attributable installed capacity was 605.3 MW as of 30 June 2013.
• Goldwind accelerated wind farm development during 1H2013, reporting 1,252.9 MW of attributable capacity under construction at the end of the period.
Page 21
155.8
244.8
117.5 134.7
443.8 411.8
259.5 133.9
2010 2011 2012 1H2013
Wind farm capacity sold (MW)Gain on sale of wind farms (million RMB)
Net Operating Cash FlowOperating cash flow was negative during the first half as the Company purchased inventory in anticipation of second half deliveries
Note: Quarterly data are in accordance with PRC GAAP.
Net Cash Flow From Operations (RMB millions)
• Net operating cash flow is typically negative during the first half as the company orders inventory to fulfill scheduled deliveries.
Page 22
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
2011
- RMB 4,133 million
2010RMB 186 million
2012
RMB 2,500 million
1H2013
- RMB 1,221 million
Source: Company filings. Notes: Data are in accordance with IFRS. Data adjusted for intersegment elimination.
Capex Reflects Development Strategy
Segment Capital Expenditures (RMB millions)
1,80487%
2,49574%
2,69081%
2,62580%
67284%
1,94196%
<4.5
<7.7 <5.0 <22
<0.5
<0.4 270
892 631 613
130
85
2,078
3,395 3,327 3,260
803
2,026
2009 2010 2011 2012 1H12 1H13
WTG R&D, Manufacturing and SalesWind Power ServicesWind Farm Investment, Development and Sales
Spending on wind farm development increased dramatically in 1H2013 as the company commenced construction on new domestic and international projects
Conservative Capital StructureDue to inventory restocking and the timing of payments, Goldwind’s cash balance decreased during 1H2013
Source: Company filings. Financial data are in accordance with PRC GAAP.
Cash and Total Debt (RMB millions)
Page 24
• Cash decreased in 2H2013 due to inventory restocking in preparation for second half deliveries. The timing of payments, such as accounts payable, also affected cash as of 30 June 2013.
• Total debt was stable at RMB 6.4 billion as of 30 June 2013, versus RMB 6.5 billion as of 31 March 2013. Net debt increased to RMB 1.7 billion from RMB 0.7 billion over the same period.
Cash
Total Debt
Net Debt -281 -2,249
-1,441 -395
961
-691 -1,694
31 Dec 2011 31 Mar 2012 30 Jun 2012 30 Sept 2012 31 Dec 2012 31 Mar 2013 30 Jun 2013
7,613 7,070
5,417 5,730 6,962
5,784 4,685
7,894 6,346
3,883 3,148 3,021 3,493 3,394
2,972
2,975 2,977 2,979 2,982 2,984
Cash Bank Debt Corporate Bonds due 2015
Agenda
Section 1 Industry Overview
Section 2 Business Performance
Section 3 Financial Performance
Section 4 Outlook
Page 25
Strategic Goals for 2013Goldwind strives to be a global leader in the development and utilisation of clean energy
Diversify our Product PortfolioSustain the competitive advantages of our existing products (1.5 MW & 2.5 MW) and speed development of new products and services, such as the 6.0 MW wind turbine.
Improve Customer Service CapabilitiesBroaden sales channels and leverage our comprehensive business model to expand our market reach.
Strengthen Core Competitive CapabilitiesEstablish high standards and benchmarking, improve management and enhance the core competitive capabilities of each business unit.
Provide Comprehensive Wind Power SolutionsFully leverage the synergies of our comprehensive wind power solutions, including wind turbine R&D, wind turbine sales, and wind services to provide customers with integrated wind power solutions. Accelerate expansion in higher value-added segments of the wind power value chain.
Page 26
Goldwind Prepared For Offshore Market GrowthGoldwind completed 100 MW Rudong coastal wind farm in early 2013, taking another major step toward large-scale offshore development
Source: Company filings.
2012
Goldwind completed 1st
50 MW Rudong
intertidal wind farm
2007
Goldwind installed
China’s first offshore
prototypeInstalled in
Bohai
2010China held
first offshore tender of
1GW to be installed offshore Jiangsu
2011
China sets an offshore
target of 5 GW by 2015 and 30 GW
by 2020
2010
Goldwind installed 2.5 MW
prototypes offshore Jiangsu
Page 27
2010
Goldwind won 200 MW
of first offshore
concession
2011
Goldwind won 1st 50
MW of Rudong
intertidal project
2013
NDRC upgraded
offshore wind power to
encouraged
2011
NEA begins central
coordination of China’s
wind industry
2012
Goldwind completed 2nd
50 MW Rudong
intertidal wind farm
Goldwind Offshore Milestones
Industry Offshore Milestones
Page 28
DISCLAIMER
This document does not constitute, or form part of any offer for subscription or sale of, or solicitation of any offer to subscribe for or sale of any securities of Xinjiang Goldwind Science & Technology Co., Ltd. (the Company), nor shall it be construed as calculated to invite any such offer, nor shall it form the basis of, nor can it be relied on in connection with, or act as an inducement to enter into any contract or commitment whatsoever. Accordingly, any decision in connection with the subscription or acquisition of securities of the Company pursuant to or in connection with any offering must be made solely on the basis of the information to be contained in the prospectus or other offering circular to be issued by the Company in connection with such offering; and no representation is made by the Company in respect of any information in this document, except as contained in such prospectus or offering circular.
FORWARD-LOOKING STATEMENTS
This presentation contains certain forward-looking statements with respect to the financial condition, results of operations andbusiness of the Company, the wind industry in the PRC and certain of the plans and objectives of the management of the Company. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results of performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such forward-looking statements were based on assumptions regarding the Company’s present and future business strategies and the political and economic environment in which the Company and its subsidiaries operate currently and will operate in the future. Reliance should not be placed on these forward-looking statements, which reflect the view of the Company’s management as of the date of this presentation only.
Corporate Contacts:Ms. Jinru MaVice President, Secretary of the Board, and Corporate Secretary
Ms. Kathryn Tsibulsky, CFAInvestor Relations Manager [email protected]
Jessie WangInvestor Relations [email protected]
Shane SunInvestor Relations Specialist [email protected]
SZEx Stock Code: 002202 HKEx Stock Code: 2208
