Pictures are generated by AI

Wind power was once the world's leader in new energy power generation, and its large-scale development was more than 10 years earlier than solar energy. In my country, until it was surpassed by photovoltaic in August 2022, wind power has always been the new energy technology with the highest installed capacity. However, after experiencing the "rush to install" of "big work and fast", the wind power industry entering the 1920 s quickly fell into a vicious circle of imbalance between supply and demand, and the performance of complete machine manufacturers stalled or even suffered a sharp decline. In this context, Many companies began to consider looking for breakthroughs in new businesses.

When performance pressure encounters a decline in demand

In the past two years, when the wind power industry has an overall overcapacity and prices continue to fall , the performance of complete machine manufacturers, especially net profit, is also under high pressure .

on the evening of April 18, yunda shares (300772.SZ), one of the leading domestic wind power manufacturers and the 4th largest new installed capacity in 2023 (Bloomberg new energy financial data), released its 2023 annual report. company realized operating income of 18.727 billion yuan for the whole year, up 7.72 year on year; the net profit of the parent company was 0.414 billion yuan, down 32.84% from the same period last year. Although there is not much ink on the net profit performance in the financial report, in the relevant risk tips, Yunda shares still mentioned that with the full entry of wind power into the era of parity, the concentration of the industry has further increased, and the competition of the whole machine enterprises has intensified, resulting in fluctuations in the price of unit products, which will have a certain impact on the company's revenue and profits.

Yunda's 2023 Performance

among the five A- share wind power companies listed on the whole machine, the other few have had a hard time either. Among them, the worst part of is electrical wind power (688660.SH). according to the company's annual report released on the evening of March 29,'s annual operating income in 2023 was 10.114 billion yuan, down 16.24 from the same period of last year, while its net profit lost 1.271 billion yuan, up 2.76 times from the same period of last year, gross profit margin decreased by 53.59 per cent year-on-year to 6.6 per cent, while asset-liability ratio rose to 77.28 per cent, and net cash flow from operating activities was -3.949 billion yuan, down 3.231 billion yuan . It is worth noting that this is the second consecutive year that electrical wind power has suffered losses, and the year-on-year decline in net profit has continued to expand. As for the continuous decline in performance, electric wind power explained that it was mainly due to the peak of offshore wind power installation in 2021 under favorable policies. from 2022 onwards, the national offshore wind power will no longer enjoy the national electricity price subsidy, and the newly installed capacity will also drop. moreover, after the peak of domestic sea and land wind power installation, the bidding price of wind turbine products will continue to decline, resulting in losses since 2022. In 2023, industry prices will continue to be under pressure. Although the company has taken a number of measures to reduce costs, on the one hand, the cost reduction is less than the sales price reduction. On the other hand, the effect of some cost reduction measures will take a certain amount of time to show, which has caused product sales orders. The gross profit margin is low, and revenue and performance continue to decline.

Electric wind power revenue continued to decline in the past two years, the loss range expanded

look at the top three enterprises in the market value of the sector, jinfeng technology (002202.SZ) although it reversed the decline in revenue, realized operating income of 50.457 billion yuan in 2023, up 8.66 year on year (down 8.77 year on year in 2022), but in terms of net profit attributable to its parent, it realized 1.331 billion yuan for the whole year, the year-on-year decline widened to 44.16 per cent (36.12 per cent year-on-year in 2022), and its net cash flow from operating activities also fell 68.48 per cent year-on-year to $1.854 billion. The pressure on the company's performance also comes from the fierce market competition environment and the continuously low sales price. At the company's performance presentation meeting on April 18, WISCO, chairman and chief engineer of Jinfeng technology, focused on the problem of "price inclusion", believing that this situation is not conducive to the healthy development of the whole industry. In addition, it is worth noting that at the end of 2021, when the stock price was at its peak, the market value of Jinfeng Technology, which was close to 80 billion yuan, has now shrunk to less than 32 billion yuan, and was overtaken by Sany Heavy Energy (688349.SH) at the end of last year, and has not yet regained the "top spot" in the market value of the plate ".

Goldwind's 2023 Performance

in addition, trinity energy (688349.SH) and mingyang intelligence (601615.SH) have not yet released the full text of their annual reports, but they have also disclosed their performance. Among them, Sany, which ranks first in market value, performed well, achieving operating income of 14.95 billion yuan in 2023, up 21.28 year on year. The net profit attributable to the parent was 2 billion yuan, up 21.55 year on year. Although this growth rate cannot be compared with the highlight moment in 2020 (revenue increased 5.3 times year on year and net profit increased 9.9 times year on year), it is compared with 2022 (revenue increased 20.89 year on year, net profit increased by 2.78 year-on-year) still has obvious progress, while revenue and net profit have maintained a positive growth performance, which is "the only one" among several major complete machine manufacturers ". According to the company's introduction, in the face of industry development opportunities and challenges, the company actively promotes product and technology leadership, domestic market and customer development, deepening strategic supply cooperation relations, comprehensive excavation and cost reduction, excellent quality management system construction, international business development, etc. Measures to achieve continuous improvement in competitiveness and good growth in performance. However, it is said that Sany Heavy Energy claimed to become the "leader of wind power manufacturers" within three years before landing on the Science and Technology Innovation Board in 2021. Judging from the installation and shipment situation, the company ranked 7th in the new installed capacity of wind power in the world in 2023 and 5th (accounting for 10.07 per cent) in the domestic market share, which is still far from Jinfeng, Vision and Mingyang. Mingyang Intelligence, on the other hand, suffered a double decline in revenue and net profit. According to the company's performance bulletin released on April 11, operating income in 2023 was 27.85 billion yuan, down 9.43 percent from the same period last year, while net profit attributable to its parent was 0.375 billion yuan, down 89.11 percent from the same period last year. The company attributed the decline in performance to three points: first, the impact of industry cycle and price competition; Second, the delivery of offshore wind power orders that the company won the bid to be delivered was delayed due to the influence of force majeure factors on the implementation progress of specific projects, resulting in a decline in sales volume. Third, the company's original plan to complete the power station product transaction in the fourth quarter was delayed, resulting in lower than expected profits from the sale of power station products. In addition, Vision Energy, which surpassed the Danish giant Vestas to be promoted to the second largest installed wind power in the world in 2023 (the first is Goldwind Technology), is not a listed company and has not released specific financial data. However, according to the report of AI Finance News Agency, the company's wind power business has also been under certain pressure in recent years, and it was on the 2024 Hurun Global Rich List released in March this year, zhang Lei, founder of Vision, has also shrunk to 16 billion yuan from 35 billion yuan last year.

Although the industry generally believes that the price of the wind power industry in 2024 can fall space is limited, but on behalf of the demand side of the installed capacity may also decline. The 21st Century Business Herald quoted experts in a report saying that with the expected decline in wind power installation in 2024, many companies may perform even worse, and some small and medium-sized manufacturing companies may be eliminated.

Even for the head companies, if there is a decline in performance for three consecutive years, it will have a greater negative impact in all aspects. It is in this context that companies have begun to accelerate their search for new outlets.

Speed up the "two seas" layout and actively try to "cross new"

Going to sea and offshore wind power, which are often referred to as the "two seas" business layout, have been increasingly elevated to a strategic height by wind power companies in the past two years, and have gradually accelerated the pace of development. For example, Yunda shares said in its annual report that adheres to the "two seas" development strategy, fully enters the offshore wind power market, and accelerates the global strategic layout . Jinfeng Technology, Sany Heavy Energy and other enterprises have similar expressions.

In terms of going to sea, as of the end of 2023, my country's wind power components and complete machine production accounted for more than 60% of the global market share, and the output of key components accounted for as high as 70% of the global market, and the cumulative export volume of wind power also increased. To more than 33.4 billion US dollars. In China, the major head manufacturers, who are gradually feeling "unable to move", have invested more energy in overseas markets with higher compound growth rate, average price and profit margin . However, at least for now, the proportion of overseas business in the total business of most companies is still small, and has not shown the momentum of explosive growth. Considering the global new energy market is also facing problems such as overcapacity and lower industrial chain prices, as well as the restrictions on China's wind power enterprises through trade measures in mainstream markets such as Europe (for example, the European Union announced on April 9 local time a countervailing investigation on China's wind turbine suppliers in Spain, Greece, France, Romania and Bulgaria), and continued to introduce policies to support local enterprises to enhance their competitiveness, my country's wind power road to sea may still encounter more twists and turns .

The other "sea" in the "two seas", offshore wind power will usher in a new breakthrough in 2024. The energy and economic research institute of CNOOC group predicted in the China ocean energy development report that China's offshore wind power is expected to usher in a big year of construction, delivery and installation in 2024 , and the new installed capacity is expected to exceed 10GW, an increase of over 40%. Qin Haiyan, secretary-general of the Wind Energy Special Committee of the China Renewable Energy Society, also said that offshore wind power is generally favored by the industry.The scene is vast. In the last two years of the "14th Five-Year Plan", this frontier field is expected to usher in a wave of "small climax" of development ". However, it is also necessary to see that offshore wind power is, after all, in the early stages of development, even if rapid growth is achieved, its annual new scale may not be as large as the industry's head enterprises themselves a year of new installed capacity.

Moreover, the future development scale and growth rate of the wind power industry are generally considered to be lower than "rising stars" such as photovoltaics and energy storage. In this context, related companies have also expanded their eyes beyond the main business and tried to cross other new energy industries, especially energy storage, the "new outlet" that has attracted much attention in recent years ", more by many wind power enterprises as a" new cross new "breakthrough .

Among them, Vision Energy has the fastest pace in "cross-border", and its energy storage shipments have entered the domestic Top5 in 2023. Moreover, Vision also proposed a "five new" strategy in 2022: through technological innovation, wind power and energy storage become "new coal", power batteries and hydrogen energy become "new oil", intelligent Internet of Things become "new power grid", zero-carbon industrial park become "new infrastructure", while fostering a green "new industrial" system. After gaining a firm foothold in the fields of wind power and energy storage, Vision has also accelerated its layout in power batteries and hydrogen energy in recent years. It has successively completed major actions such as acquiring Japanese battery company AESC and starting a global cooperation plan in the field of green hydrogen energy (it is said that Vision will cooperate with Australian FMG to develop 10 million tons of green hydrogen by 2030). In terms of zero carbon, in addition to the flagship project of Erdos zero carbon Industrial Park, the company has also announced the "big goal" of building 100 zero carbon industrial parks by 2032 ".

The cross-border or diversified development layout of other wind turbine manufacturers is relatively more focused, and energy storage is often the most core part of the relevant planning .

on March 19 this year, yunda shares issued the "announcement on energy storage company project follow-up and related transactions", which is called to stimulate the core staff's passion for innovation and entrepreneurship and promote the development of innovative business. the company plans to follow up on the implementation of energy storage company project. The company plans to set up a holding subsidiary Yunda Energy Storage Technology Co., Ltd. as the project operating company, with a registered capital of 0.1 billion yuan (proposed), of which the company contributes 86.9 million yuan (proposed) and the investment object contributes 13.1 million yuan through the joint establishment of the investment platform. As early as October 2023, Yunda changed the company's full name from "Zhejiang Yunda Wind Power Co., Ltd." to "Yunda Energy Technology Group Co., Ltd.". Its official website also issued a document stating that after the name change, the company will focus on new energy. And smart grid, energy storage, photovoltaic, hydrogen production and comprehensive energy development, and actively build a new energy enterprise focusing on new energy and carbon emission management. Goldwind Technology and Mingyang Intelligence, which have a higher market share in the wind power market, also have their own energy storage subsidiaries or equity companies, and have been actively involved in the energy storage business in recent years. According to the analysis of the "Planet Energy Storage Institute", a vertical media in the field of energy storage, all the four major wind power giants have entered energy storage, not only due to the price inclusion and profit decline in the field of wind power, but also related to the actual needs and inherent advantages of wind power enterprises: on the one hand, the requirement of wind power distribution and storage makes the whole machine manufacturers holding wind power projects often need energy storage, which also establishes a cross-border foundation, the rich experience of product development, process improvement, supply chain management and quality management accumulated by wind power enterprises in the field of equipment manufacturing can also be used in the field of energy storage. In the 2023 annual report, Yunda shares and Jinfeng Technology also highlighted the energy storage business. The former said that it was actively expanding diversified businesses such as energy storage and EPC general contracting of new energy projects. At present, it has completed the research and development and batch application of 2.68MWh air-cooled and 5MWh liquid-cooled products with complete independent intellectual property rights in the research and development of energy storage products, breakthroughs have also been made in the user-side market, pack products and self-developed battery management system (BMS). Jinfeng Technology said that the company actively grasped the development opportunities of emerging growth businesses and made major breakthroughs in mixed tower, energy storage and double carbon businesses. Its energy storage business scale achieved double-speed growth. In 2023, it established the first energy storage production base to realize independent production and manufacturing of energy storage products, and complete the production capacity landing 3GWh, with no commissioning shipping capacity. In addition, in the zero-carbon business, Goldwind's 2023 load-side energy grid-connected scale increased by nearly 2.7 times year-on-year, and achieved new breakthroughs in high-energy-consuming zero-carbon park solutions in industries such as chemical, cement, steel, and data centers. Titanium media APP also highlighted in previous reports that Jinfeng set up a wholly-owned zero-carbon subsidiary last year, launched the "zero-carbon partner" program, and was approved for demonstration projects such as 2 million-kilowatt wind power to produce green hydrogen in Xingan League. All signs show the company's ambition in zero-carbon. Apart from expecting to "take a share" in this market, which is expected to exceed 10 trillion in the future ", these layouts may also pave the way for it to speed up its journey to Europe and other markets with high carbon footprint requirements (performance is under pressure, debt is high, where can Jinfeng take advantage of the east wind?).

In a survey conducted by TÜV Rheinland in 2023, 43% of energy storage practitioners believe that wind power will be the industry most closely integrated with energy storage in the next 3 years

even trinity, which has recently entered the wind power industry, is actively expanding its new business. on November 15, 2023, trinity energy announced that it plans to invest 6.5 billion yuan to build a digital demonstration project of trinity Jilin Changling scenic hydrogen storage and ammonia storage. it is reported that the project is an integrated scenic hydrogen storage and ammonia industry planned in Changling county, Songyuan city, photovoltaic, wind power stations, transmission lines, hydrogen-producing alcohol plants and storage and transportation, energy storage facilities will be built.

In the evaluation of related projects, Sany Heavy Energy emphasized the potential and considerable prospects of frontier fields such as hydrogen energy, green methanol, and energy storage, and focused on expounding the development of new businesses in these fields for companies with wind power as the main business. The rationality, and analyzed the reserves and advantages of talents, markets, technology, and funds, etc., which generally look similar to the views mentioned above. However, in carrying out the risk analysis of the new industry, Sany also mentioned risks such as "whether it can be successfully introduced into the market and realize sales, there is some uncertainty", "the expansion of business scale may lead to management risks", "failure to grasp the development trend of the industry, or failure to develop and reserve relevant technologies that meet the future needs of customers. In fact, judging from the situation in 2023, the degree of "volume" in the energy storage field is no less than that of wind power. According to the "White Paper 2024 on Energy Storage Industry Research" issued by Zhongguancun Energy Storage Alliance, the average capacity utilization rate of the industry is only 50% by the end of 2023. By February this year, the average bid price of domestic energy storage system dropped 37% year on year, and some enterprises have bid at a loss. However, hydrogen energy and zero carbon have not yet entered the stage of large-scale development, and most enterprises are still exploring reliable profit models. Whether the "two seas" strategy and "cross-border" strategy of wind power manufacturers can support the performance and long-term development in the future needs further observation. (this article starts with in titanium media APP, author | Hu jiameng , editor | Liu yangxue )