Goldwind’s third-quarter profit misses expectations as turbine sales fall and costs and disposal gains come under pressure

Why did third-quarter profit fall short of expectations?

Goldwind reported net profit of 1.021 billion yuan for the third quarter of 2026, down 7% year on year and below market consensus; revenue for the same period was 18.284 billion yuan, down 6.8% year on year. Citi attributed the profit shortfall mainly to lower turbine sales, a weaker-than-expected gross margin, and lower gains from wind-farm disposals.
Third-quarter turbine sales fell 14.9% year on year to 6,643 MW, leaving cumulative sales growth for the first three quarters at just 3%, with sales reaching 19,007 MW. Growth over the first three quarters masked the weakening of sales in the single quarter.
Third-quarter investment income was just 11 million yuan, down 97.1% year on year, mainly because of lower gains from wind-farm disposals. Profit was therefore under pressure from both equipment sales and asset disposals.

When the company disclosed its interim report in August, it lowered its 2026 turbine sales target from 40 GW to 35 GW. Given the year-on-year decline in third-quarter sales, Citi believes the target remains at risk of a further cut.
Domestic demand also has limited room for meaningful expansion. Based on discussions with the Chinese Wind Energy Association, Citi expects China to add 110–120 GW of wind capacity in 2026 and 100–120 GW in 2027, broadly flat compared with 120 GW in 2025.
The underlying constraint is declining project returns: competition is driving electricity prices down, while increased wind curtailment is reducing utilization. Wind-farm investment is becoming less attractive, affecting new capacity additions and limiting equipment customers’ ability to accept price increases.

The company’s overall gross margin was 14.5% in the third quarter, up 1.5 percentage points year on year but down 2.3 percentage points quarter on quarter and below Citi’s expectations. The bank believes the year-on-year improvement may reflect a higher share of high-margin power generation, while the sequential weakening may reflect rising turbine component costs.
The profitability outlook for the turbine business itself is weaker: the company expects a 9%–10% gross margin on turbine sales in 2026, below the 11.4% recorded in the first half, implying pressure in the second half. Citi cited higher raw material and freight costs and lower hedging gains among the reasons.
According to Citi’s discussions with the Chinese Wind Energy Association, turbine raw material prices could rise 4%–10% amid supply disruptions related to the Middle East conflict; domestic manufacturers generally also find it difficult to pass additional costs on to wind-farm customers whose returns have already declined.

Goldwind’s gross margin on overseas turbine sales is higher than at home; exports accounted for 7 GW of its 40 GW sales target at the start of the year. The Chinese Wind Energy Association expects Chinese turbine exports could grow 30%–40% annually over the next few years, providing a source of growth beyond domestic capacity additions.
But a shift in export destinations will weaken the contribution to profit: sales went mainly to South Africa, South America, South Korea and Japan in the first half, and are shifting in the second half to the more competitive markets of the Middle East, Central Asia and North Africa, where Citi expects lower gross margins.
Winning overseas orders also depends on repair and maintenance capabilities. Overseas buyers often prefer suppliers with global service teams, so the link between industry export growth and an individual company’s orders and profits also depends on service networks and market structure.

The report lists a buy rating and a target price of 20 Hong Kong dollars, but Citi also expects weaker-than-expected results to weigh on the share price in the short term. Its target price uses a discounted cash flow method focused on the company’s long-term operating value, with key inputs including a weighted average cost of capital of 8.4% and a perpetual growth rate of 4%.
Current funding and asset-quality pressures should also be considered: net investing cash outflow in the first three quarters rose 59.2% year on year to 2.932 billion yuan, which Citi believes may be related to fewer wind-farm disposals; credit impairment losses over the same period rose 46.4% year on year to 230 million yuan. Insufficient new orders and a lower-than-expected turbine gross margin are among the downside risks to its target price cited by the bank.