Goldwind’s third-quarter gross profit rises despite revenue decline, while lower other income weighs on net profit
Morgan Stanley said lower turbine shipments and weaker wind resources reduced Goldwind’s third-quarter revenue, but an improvement in turbine gross margin drove gross profit growth; a decline in other income caused net profit to edge down year on year.
Original source：Morgan Stanley Asia LimitedFirst published on Unhidea：Original source date：
Key takeaway
Goldwind’s third-quarter results combined lower revenue, higher gross profit and lower net profit. Morgan Stanley maintained its Equal-weight rating on the H shares.
Why did gross profit rise despite lower revenue?
In the third quarter of 2026, Goldwind’s revenue was 18.2 billion yuan, down 6.6% year on year and up slightly by 0.3% quarter on quarter. Morgan Stanley attributed the revenue decline to lower turbine shipments and weaker wind resources.
Despite lower revenue, third-quarter gross profit rose 5.1% year on year to 2.6 billion yuan, mainly supported by an improvement in the turbine business’s gross margin. The company’s overall gross margin was 14.2%, up 1.5 percentage points from 12.7% a year earlier.
The improvement did not continue quarter after quarter: the overall gross margin was below the second-quarter figure of 16.4%, down 2.2 percentage points quarter on quarter.
Why did gross profit growth not translate into net profit growth?
Third-quarter net profit was 1.021 billion yuan, down 7.0% year on year but up 7.7% quarter on quarter. Morgan Stanley attributed the year-on-year decline to lower other income: the improvement in gross profit therefore did not fully offset that impact.
Results for the first three quarters combined still showed growth: revenue was 51.8 billion yuan, up 8.1% year on year; net profit was 2.875 billion yuan, up 11.2%. The cumulative overall gross margin was 15.6%, up 1.6 percentage points year on year.
Turbine shipments in the first three quarters were 19.0 GW, above 18.45 GW in the same period a year earlier; this contrasts with the year-on-year decline in shipments in the third quarter alone.
How does Morgan Stanley view the H-share valuation?
Morgan Stanley believes the results were in line with market consensus, with the impact on the investment thesis and the direction of consensus earnings per share estimates for the next 12 months both broadly unchanged. The bank maintained its Equal-weight rating on the H shares with a target price of HK$16.74; the report listed a closing price of HK$7.30 on 23 October 2026.
The target price is based on a ten-year discounted cash flow model, using a weighted average cost of capital of 8.8% and a zero terminal growth rate. Key variables listed by the bank include wind power installations, turbine gross margins, cost control and wind farm utilisation: improvement or weakening in these factors would respectively pose upside or downside risks to the valuation.
