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Xinjiang Goldwind Science & Technology Co., Ltd. (Goldwind) announced its annual results for the year ended 31 December 2011 (the "reporting period").
In 2011, volatility in the domestic and global economies presented great challenges for China's wind power industry. During the reporting period, to the Group generated revenues of RMB12,755.97 million and net profits of RMB717.99 million. Basic earnings per share for the year were RMB0.23.
According to statistics from the Global Wind Energy Council ( "GWEC"), the accumulated installed global capacity for wind energy reached 238.4 GW in 2011, an increase of 20.6% compared to 2010. After recent rapid development, China wind power industry entered a period of adjustment in 2011 as regulations were established for systematic wind power management. Mounting competition in the domestic wind power market led the industry to call for a more sustainable competitive framework. In response, during the reporting period the Chinese government introduced a series of policies and industry standards aimed at facilitating more orderly development and improving technological standards. These included enhancing management of grid connection technology, centralizing government approvals for wind power farm projects, further improving wind power industry standards and technological requirements, and increasing supplementary feed-in tariffs for renewable energy. Taken together, these changes are expected to facilitate better coordination, allowing a greater number of wind farms to be connected to the grid, and to support the sustainable development of the industry.
Mr. Wu Gang, Chairman and Chief Executive Officer of Goldwind, said: "in 2011, the Group prepared for industry and market changes by focusing on innovation and accelerating product upgrades and development. We also expanded our global operations, strengthened our comprehensive solutions capabilities, and increased the operating scale of our investment in wind farms and our wind power services segment. Although our financial performance was negatively impacted by slowing slower market conditions, the Group nonetheless achieved success in areas that are essential to sustaining our long-term development, including R&D, quality control, order intake, services, and international growth. Moreover, the Group installed 3,600MW in China during 2011, which represents a domestic market share of 20.4%, representing the largest market share in China, up from second largest in 2010. We expect that after experiencing fierce price competition in the past year, the industry will gradually return to more rational competition. In the future, the industry's focus will shift towards quality, innovation, services, new profit models, and differentiation strategies. Customers will be increasingly concerned with power generation efficiency and the lifetime cost per kilowatt-hour. Because our wind turbines are highly efficient, reliable, and have low operating and maintenance costs, our core competitive advantages position us well for long-term development and strengthen our lead in the industry."
Revenue for the Group is generated from three business segments: (i) WTG R&D, manufacturing and sales, (ii) wind power services, and (iii) wind farm investment, development and sales.
In the wind turbine generator R&D, manufacturing and sales segment, the Group strived to improve quality and innovation to further enhance product value. At the end of 2011, the Group??s total installed capacity in China was 12,678.85MW, including 6,217 units of 1.5MW WTGs and 46 units of 2.5MW WTGs. The technical availability rate of the Group??s 1.5MW WTGs reached 98.9% in 2011, while the 2.5MW WTGs, which were in their first year of commercial production, achieved a technical availability rate of 95%. Such consistently high quality and reliability allowed the Group to receive the only "national Quality Award Unit" in the wind power industry. The Group has also continuously upgraded and optimized its 1.5MW direct-drive permanent magnet ("DDPM") WTGs and has responded to the pressures of increasing raw material costs by improving our design. During the reporting period, the Group's 1.5MW DDPM WTGs successfully passed Germanischer Lloyd's ("GL") stringent zero voltage ride-through test, further demonstrating our WTG's superior grid connectivity.
Intellectual property rights are essential to the Group's development. During the year under review, Goldwind continued to pursue breakthroughs in its proprietary DDPM technology and to develop specialized WTG models adapted to market demand and technological trends. As a result, the Group maintained DDPM's lead in various market segments. In 2011, Goldwind began commercial production of its high altitude and low wind speed 1.5MW DDPM WTG series, expanding its product line, helping customers explore new wind power markets, and establishing a process for the future development of specialized WTGs. In recognition of Goldwind??s ability to customize WTGs to suit challenging operating environments, the Company was selected, for the second consecutive year, as one of the "2012 50 Most Innovative Companies" by the Massachusetts Institute of Technology's Technology Review magazine.
The Group commenced commercial production of the 2.5MW WTGs and progressed as scheduled with the development of specialized 2.5MW WTG models during the reporting period. The 103/2.5MW and the low wind speed 106/2.5MW WTG models, both onshore models, were installed and put into operation. A prototype of the 109/2.5MW unit designed for offshore installation was assembled. Four prototypes of the 3.0 MW hybrid PM WTG were installed during the year under review and are expected to commence operation in the first quarter of 2012. Research and development of a 6.0MW offshore WTG unit progressed as scheduled, with trial production of key components completed during the year under review and a prototype expected in the first half of 2012.
The Group seeks to expand, enhance and strengthen the competitiveness of its operations in the wind power services segment. By providing comprehensive wind power solutions, the Group is able to maintain optimal generating capacity for the entire 20 year lifespan of its products, maximizing value for its customers and providing the Company with a competitive edge. This allows Goldwind to differentiate itself from its competitors and develop new sources of profitability. As at 31 December 2011, the Group had completed the maintenance of over 6,000 cumulative units of WTGs. Since 2008, the cumulative sales of the SCADA system and the Group's energy management platform, both leading wind farm information technology products, exceeded 80 and 50 units, respectively. The Group's wind power services segment generated revenues of RMB362.66 million in 2011, an increase of 23.91% compared to 2010.
The wind farm investment, development and sales segment was a key source of profitability for the Group in 2011, partially offsetting weaker manufacturing margins evident throughout the industry. During 2011, the Group sold all or part of its equity interests in 7 wind farm subsidiaries (totaling 9 wind power projects), with a combined attributable installed capacity of approximately 244.8MW. As of the end of the reporting period, the total installed capacity of completed wind farms was 1,338.0MW and the attributable installed capacity was 572.2MW. The Group also had wind farms under construction with a total capacity of 622.5MW and an attributable capacity of 558.3MW.
The Group has been remarkably successful in expanding internationally and currently has operations on six continents. During the year under review, Goldwind achieved international sales of RMB1,208.92 million, exceeding expectations in the United States and a number of emerging wind markets. In addition to selling WTGs directly to global customers, the Group also invests in and constructs wind power projects abroad. International sales represented 9.48% of total sales in 2011, up from 2.14% in 2010. During the year under review, Goldwind entered into a contract with the Ecuador Electricity Corporation ("CELEC EP") to provide their Villonaco wind power project with WTGs and comprehensive services, further demonstrating the Group's comprehensive wind power solutions capabilities. The Group also signed an agreement with Mainstream Renewable Power, a globally recognized renewable energy developer, to supply 23 units of 1.5MW low wind speed DDPM WTGs for Phase I of its Negrete wind farm project in Chile. This marked Goldwind's first project in Chile and the overseas debut of its low wind speed DDPM WTG. The Group's 1.5MW DDPM WTG also passed Intertek's ETL certification, demonstrating that its design, quality, and performance comply with the safety standards of the United States and Canada. As the first Chinese WTG manufacturer to receive this certification, Goldwind further differentiated itself within the US and Canadian markets.
Looking ahead, Goldwind will continue to serve as a global leader in the development and utilization of clean energy. In response to the current opportunities and challenges in the wind power industry, the Group will continue to innovate its technology, operations, and management. Goldwind will enhance its competitiveness in WTG R&D, manufacturing, sales, and services, while accelerating its expansion along the wind power value chain to provide comprehensive wind power solutions to our customers.
Mr. Wu concluded:"Growth of Asia's wind power industry will be the fastest in the world, and China will continue to lead the market. During the Twelfth Five-Year Plan, wind power in China will enter a phase of stable development. After a period of rapid growth, China's wind power industry will increasingly focus on quality and capacity utilization. Along with the healthy development of the wind power industry, Goldwind's core competitive advantages in product quality, R&D and technological innovation, diverse wind power services and geographic expansion, will differentiate the Group and allow us to further strengthen our leading position in the global wind power industry."
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| IRT1016-2 IKO | 10 | 16.5 | |
| IRT1015-1 IKO | 10 | 15.5 |