Goldwind Technology Strong 1Q26 Results, H-Share Buy Maintained with Target Price Raise

Overview

HSBC published a performance review report on Goldwind Technology for Q1 2026. Goldwind achieved a net profit attributable to the parent of RMB 907 million in 1Q26, up 49% YoY, driven mainly by increased shipment volume, margin recovery, and operating expense savings. HSBC expects upward pressure on components and logistics costs due to geopolitical factors in 2Q26 but maintains its full-year 2026 profit growth forecast of 40% and accordingly raises 2026-2028 profit forecasts by 6-8%. Based on a DCF valuation model, HSBC maintains a Buy on H-shares (attractive valuation at 17.7x 2026e PE) and a Hold on A-shares (elevated valuation at 32.7x 2026e PE), while raising the H/A-share target prices to HKD 18.20 and RMB 29.20 respectively.

Core views

1Q26 performance was strong: Goldwind's 1Q26 net profit of RMB 907 million (+49% YoY) was mainly driven by three factors: 1) Improved profitability for domestic onshore turbine products driven by economies of scale and ASP recovery; 2) Savings in unit selling and administrative expenses; 3) Investment income of RMB 282 million (mainly from the sale of a 0.1GW wind farm). Turbine business saw both volume and profit increase: 1Q26 turbine sales volume surged 133% YoY to 6.0GW, including 0.4GW offshore wind and 1.2GW overseas orders. As of end-1Q26, external orders on hand stood at 50.7GW, including 9.6GW overseas orders. Full-year guidance for external shipments exceeds 37GW, including 2.7GW offshore wind and over 7GW overseas. Wind farm business: As of end-1Q26, wind farm capacity was 10.0GW (+25% YoY), with utilization hours down 14% YoY; newly added wind farm capacity in 1Q26 was 177MW, with 102MW sold. 2Q cost volatility expected: Geopolitical tensions may push up component and logistics costs in 2Q26, especially for exports. This is also why Goldwind reiterated its 9-10% margin target for the manufacturing business. However, HSBC still expects 40% full-year 2026 profit growth, benefiting from increased turbine sales volume, economies of scale, and product mix optimization. Valuation and ratings: H-shares are attractively valued (17.7x 2026e PE), maintain Buy; A-shares are elevated (32.7x 2026e PE), maintain Hold. Target prices raised to HKD 18.20 and RMB 29.20 respectively.

Analysis framework

HSBC uses a DCF (discounted free cash flow) valuation model to price Goldwind Technology, with key assumptions including: WACC of 6.7% (based on 4.25% risk-free rate, 4.75% equity risk premium, beta of 1.1, cost of equity of 9.5%), and terminal growth rate of 2.0%, all unchanged. The H-share target price is raised from HKD 17.00 to HKD 18.20, implying 15.5% upside. The A-share target price is determined using the A/H premium method: based on the latest A/H premium level, applying an 85% premium rate (previously 90%) to the H-share target price yields an A-share target price of RMB 29.20 (previously RMB 27.90), implying 14.6% upside. Earnings forecast adjustments: Based on 1Q26 results, SG&A expenses for 2026-2028 are reduced by 5%, and net profit forecasts are increased by 6-8% (2026 increased from RMB 3.607 billion to RMB 3.895 billion), reflecting expected lower operating expenses.

Methodology notes

• Valuation MethodDCF Cash Flow Discounting

  DCF Free Cash Flow Discount Model

  Estimates intrinsic value by forecasting future free cash flows of the company and discounting them to the present using WACC. This report uses WACC of 6.7% and terminal growth rate of 2.0% to reflect the present value of Goldwind's future cash flows.

• Valuation MethodPE/PEG valuation

  PE Valuation Multiple and A/H Premium Method

  Compares H-shares and A-shares valuation using PE multiples. H-shares at 17.7x are considered attractive, while A-shares at 32.7x are considered elevated. The A/H premium rate (85%) is also used as an anchoring method for the A-share target price, reflecting the valuation difference between the two markets.

• Industry/Industrial Analysis FrameworkVolume-price decomposition

  Volume-Price Decomposition and Economies of Scale Analysis

  Decomposes the turbine business into sales volume (volume) and ASP/margin (price) for separate analysis. This report points out that sales volume growth (+133% YoY) together with ASP recovery and scale efficiency drove profit improvement, which is a typical volume-price decomposition approach.

• Competitive and Strategy FrameworkProduct life cycle

  New Business Catalysts and Product Lifecycle Expansion

  Evaluates green methanol and commercial aerospace as new growth drivers beyond the traditional wind power business, reflecting a strategic perspective of extending the company's lifecycle from the mature turbine business into new business areas.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Goldwind Technology H-Share (02208.HK)

  Beneficiary, Maintain Buy Rating

  Strengths

  Attractive valuation (17.7x 2026e PE), improving turbine business outlook, green methanol and commercial aerospace provide upside

  Comparison

  Valuation discount relative to A-shares, more attractive

  Risks

  Lower-than-expected turbine sales, intensified competition, tight upstream equipment supply, lower-than-expected margins, lower-than-expected wind farm investment returns, unfavorable policies, slow overseas market expansion

• Goldwind Technology A-Share (002202.SZ)

  Neutral Position, Maintain Hold Rating

  Weaknesses

  Elevated valuation (32.7x 2026e PE), stretched valuation after recent rise

  Comparison

  Higher valuation premium relative to H-shares

  Risks

  Same risks as H-shares; upside risks include higher-than-expected margins, faster-than-expected offshore wind and overseas market development

Key data

• 1Q26 Net Profit Attributable to ParentRMB 907 million+49% YoY
• 1Q26 Turbine Sales Volume6.0GW+133% YoY, including 0.4GW offshore wind and 1.2GW overseas
• External Orders on Hand50.7GWAs of end-1Q26, including 9.6GW overseas orders
• Wind Farm Capacity10.0GW+25% YoY
• 2026E Profit Forecast AdjustmentRMB 3.895 billionUp 8%, +40% YoY
• H-Share Target Price/Implied UpsideHKD 18.20/+15.5%Previously HKD 17.00
• A-Share Target Price/Implied UpsideRMB 29.20/+14.6%Previously RMB 27.90
• H-Share/A-Share 2026E PE17.7x / 32.7xH-Share valuation attractive, A-Share valuation elevated

Impact & implications

HSBC believes Goldwind Technology's H-shares are attractively valued, maintaining a Buy rating, and is optimistic about the improvement of its turbine business over the next 1-3 years, as well as upside from green fuels and commercial aerospace. The valuation discount of H-shares relative to A-shares remains attractive. A-shares appear elevated after recent gains, so a Hold rating is maintained. Subsequent catalysts include the green methanol project (Xing'an League project to commence production in 2H26, reaching 500,000 tons/year capacity by 2027) and commercial aerospace (LandSpace, with a 4.14% stake, may generate fair value gains from a potential IPO).

Risks

• Lower-than-expected turbine sales
• Intensified industry competition
• Tight supply of upstream large turbine equipment
• Lower-than-expected margins
• Lower-than-expected wind farm investment returns
• Unfavorable government policies
• Slower-than-expected offshore and overseas market expansion

What to watch

• Green methanol: Xing'an League project to commence production in 2H26, reaching full capacity of 500,000 tons/year by 2027
• Commercial aerospace: Stake in LandSpace (4.14%), potential IPO could contribute 2026 fair value gains
• Impact of upward pressure on 2Q26 component and logistics costs on export business
• Progress toward achieving full-year 37GW external shipment target