Goldwind Sci&Tech Co H

Dear investors, good afternoon. Welcome all of you to join us for the Gold Wing Science and Technology 2024 annual result announcement. Today joining us are Mr. Wu Gang, Chairman, Ms. Ma Jingru, VP, Board Secretary and the Company Secretary, Mr. Wang Yuanhong, CFO, Mr. Cheng Xiuhua, Group VP and GM of the Wind Power Industry Group, First of all, we're going to welcome Ms. Ma Jinglu to work us through the industrial development and operationals of the company in 2024. Then we will have the CFO, Mr. Wang Hongyan, to work us through the financials of 2024. Then, according to the CSRC regulation guidelines, we're going to welcome Ms. Ma Jinglu to work us through the market cap management of the company. Now, Ms. Ma, please. Ladies and gentlemen, I'd like to welcome you to join us for our annual result announcement. So first of all, please allow me to walk you through the industry and our company first. Please go to slide three. On slide three, we do show the wind power industry worldwide. We can see global new installation in 2024 achieved 121.6 gigawatt, grow by 3.9%. with offshore wind of 109.9 gigawatt increased by 3.7 worldwide. Offshore, totally 11.7 gigawatt, growth by 6%. On the right side, you can also see within the 121.6 gigawatt new installation, around 70 close to, 70 total are coming from China, totally 85.5 gigawatts, where you can also see that We also see that Brazil kept the third place in ranking with installation capacity of 4.2 gigawatts in 2024. Then China recorded 79.8 gigawatts of the new grid connection, which includes 75.8 gigawatts from the onshore wind power and 4.0 gigawatts from the offshore wind power. In 2024, the accumulated grid-connected wind power capacity totaled 520.7 gigawatts, taking 50.5%. In the power mix, the thermal power declined to 43.1%. In terms of the total power consumption, it was 9,852.1 billion kilowatt-hour, increased by 6.8%. 991.6 billion kilowatt-hour of the wind power production represents an increase of 60%. and the penetration rate of 10.1, 27 member states of the European Union and the UK has an average wind energy share reached 20 in 2024.

Especially for Denmark, you can see that the highest share of the wind at 56, whereas that's also

Take a look at utilization rate and the LCOE. National average wind power utilization rate was 95.9%. Utilization rate was in six provinces and cities even kept as a very low level, but still relatively lower compared with other cities and countries, but still in certain provinces, for example, like in Anhui and Fujian, and so forth, as well as Shanghai and Jiangsu, Zhejiang, the polarization rate can reach 100%. The LCOE of the onshore wind has been dropped to a more competitive USD 0.019 in 2003, reducing 59.6% in the past five years. We can also see that China's average construction cost of the onshore also continues to grow. Coming up, let's see that domestic public tender market totaled 164.1 gigawatt in 2024, representing a 90% growth.

Around offshore public tender totaled 150, 2.8 gigawatt, and offshore totaled 11.3 gigawatt.

A region 80.5 of the tender originated from the northern part of China, where 90.5 were in south. On the right side, in December 2024, overall average building price for WTHU supply in the market record RMB 1,005.27 yuan a kilowatt. We also show you the policy support. The government actually released many supportive policies to continue to support a new mechanism for energy development and utilization and to build a green and low-carbon economic system. First of all, the government is supporting a green and low-carbon economic system. For example, on 11th of January, the Central Committee of the government has already proposed that in 2035, we're going to build a beautiful China target. And China is going to hit the carbon neutralities in 2030 and the carbon peak in 2030 and the carbon neutrality in 2060. And it also proposed that... energy consumption and the carbon dioxide emission per unit of GDP were reduced by approximately 2.5% and 3.9% respectively, and the proportion of the non-fossil energy consumption were reached approximately 80.9%. On 31st of July, the Central Commission of the Communist Party of China and the State Council issued the Transformation of the Economic and Social Development Act, And exclusively speaking, in 2020, the proportion of the non-fossil energy consumption in the whole society would increase to about 25%, where at the same time, China also passed the energy laws, which has already started And you see that urinary energy substitution action, which aims to promote the construction of a green, low-carbon, and recycling development economic system and promote the formation of the green, low-carbon mode of the production and the lifestyles. Well, as we are accommodating new carbon control policies, you can see that... By 2025, the new energy market consumption will account for more than 50%. By 2029, new energy will be fully participated in the market. Then we're going to build a dual control policy and management mechanism for carbon emission and create a green environment for electricity consumption. On 30th July, and the government has already proposed The work plan to accelerate establishment of the dual control system of the carbon emission, proposing to improve the management system for energy conservation and the carbon reduction of enterprises. And the corresponding regulations also be proposed. And the government also promote the development of the decentralized wind power and open up space for development of the deep sea wind power. Especially the State Council has already issued an action plan in promoting large-scale equipment renewal and consumable goods creating. and also promoting multiple measures of supporting the industrial development. With all the support that's been available, the world power industry in China is going to maintain a very stable growth, continue to hit the dual carbon goals in China. With such a backdrop, let's also take a look at our business. We have four points to share with you our business. First of all, you see that the WTG manufacturing sells wind farm investment, wind power service, and other business. And the WTG manufacturing themselves accounted for 68.87% of the revenue, and then 90.20% from wind farm development, 9.74% from wind power services, other business 2.19%. Last year, our WTG... and the manufacturing cells being record of very good growth. And we're consecutive years of the number one in China and consecutive 10 years of the top three in the world. By the end of last year, and our accumulated WTH installation worldwide has already been 135 gigawatt, with 38 countries being covered, especially we set up eight R&D centers, with more than 800 patents and the standards we made. If you take a look at our turbine cells, last year, our external cells reached 60 gigawatts, although by 16.6 percent. Especially, we see 60 percent are above 6 gigawatts, where 38% are for 4 gigawatts once, and we seldom have the capacity lower than 4 gigawatts for sales. Let's also take a look at the backlog. By the end of last year, the company's total order backlog was 47.4 gigawatts, the highest number in history. External order backlog was 45.1 gigawatts, including 8.6 gigawatts of successful bid and 36.4 gigawatts of the side contract. Additional 2.3 gigawatts for order works for the company's own waveform development project. So you can see that from the order mix, about 80% of those orders and backlog are about 6 megawatts.

South America, Middle East, and Africa, and Europe, Asia, and Australia market,

By the end of last year, our total installation worldwide has already been stood at a very good number, and especially our total cumulative installation worldwide in overseas market is already 8,780.6 megawatt, of which installation in North America, Australia, Asia, South Africa, South America exceed one gigawatt. By the end of last year, our overseas external order backlog was 7,031.82 megawatt. Our overseas operating capacity was 433 megawatt. You can also see for grid connection last year, the grid connection wind power projects totaled 8,043 megawatt, of which 30 percent are in northwestern region, 22 in north China. And you can also see that all together, we have under construction wind capacity at home and abroad totaled 3,764 megawatt. You can also take a look at the right side pie chart to know the distribution of those installations. Where at the same time, the company also well performed on wind power operation and service. Our self-run wind farm recruited 2,340-hour utilization, 230 hours higher than the national average in 2024. Because of our ever-improving technology and very good credit record and operational excellency, you can see that we also maintain a very good under-operation capacity, reaching nearly 40 gigawatts, an increase of 30% on our basis. The company also paid much attention to the sustainable growth of the company, and we're also with the great lead of the board to build very strong structures for sustainable development. In 2018, we actually built our sustainable development plan. And for the past few years, you can also see with such a great strategy to guide our work, We also continued with sustainable development. Sustainable development covering the following fields, including honest and compliant operations, green and environmental-friendly operations, sustainable industry chain, fire and sound work environment, harmonious community relations. We conducted the following work by covering the fields mentioned above. For example, we do have some prioritized work leads every year for sustainable achievements. For example, Last year, we have compiled and achieved the following goals. For example, we do have been awarded as Class A in 2024 information disclosure quality rating from SGSE, but at the same time, closing rate of the compliance and reporting reached 100%. For green and the environmental friendly operation, we will always maintain carbon neutrality at operational level, including scope 1 and scope 2. And in 2024, 61.8% of our global production and operation activities being powered by green electricity. Last year, we had 10 plants popped ISO 5000 and 50,001 energy management system certification. Eight plants have obtained the National Provincial Certification for Green Factories. Where at the same time, you can see we also maintain The supplier of the wind turbine components responsibility audit rate reaching 100%. And the major suppliers of the gold wind used 78% of the green power for manufacturing wind power product, grow gold wind product. No child labor, no folks labor, bonded labor, or human trafficking in gold wind.

And we also have a... zero of the risks.

Right at the same time, you can also see we establish the science and practice space in four of our campuses located in Beijing, Xinjiang, Shandong, and Jiangsu. Last year, our cumulative auditory work reached 47,346 hours. Last year, we engaged more than 1,000 teenager students participating in Gold Wind Youth Science Publicization Projects. And besides the sustainable development, we also have a more sustainable development in practice.

For example, for low-carbon wind turbine in the last year, we have completed life cycle assessment LCA for 12 turbine models. And you can also see that the result of the

Emission per kilowatt-hour throughout the entire life cycle of the Goldwing, the current available work turbine units were down to 3.52 grams, less than 1% of the emission of the traditional thermal power source, demonstrating our commitment for sustainability and development technology in this product. Where for green production and operation, we will be able to reduce electricity consumption by 6.55 million kilowatt-hours. per year and carbon emission by around 3,949 tons per year. Regarding the wind turbine recyclings, last year we launched our development of the first JWBD, a recyclable blade, and at the same time, it boosts over 97% of the recliable materials in its composition. And in 2024, our major supplier of the Gold Wind used 78 of the green power of the manufacturing in manufacturing the Gold Wind product. Coming next, let me welcome my colleagues to introduce the financials. Ladies and gentlemen, I'm Wang Hongyan. Thanks for keeping an eye on the wind power industry. And thanks for being here for our annual result announcement. Let me just spend the following 10 minutes to work you through our financials. I divided our financials into two parts. The first part is the profitability, then segment results, then operation index, and then solvency position. I will also share with you the cash flows assets, so altogether five points for my financials presentation. So from the Carter perspective, as usual, gray represent the 2023 and blue represent the 2024. slide 17 will show you our profitability index in the upper right corner we do show you our revenue you can see that the full quarters in 2023 and full quarters in 2024 different color band shows different years so in other words in 2024 We increased our revenue by six billion. Six billion are coming from the W2G manufacturing industry, where at the same time for the profit margin, and altogether comprehensive profit margin was 30.8%, below by 0.74%, where at the same time you can see that we also take our actions according to the requirement of the Ministry of Finance. The government position has been classified into cost, so that's the reason we made the further adjustment. The right-down corner will also show the net profit attributable to the owners of the company. And you can also see that at the same time, we further improved our key business and improved the GDP margin greatly.

Where at the same time, we also further improved the profitability by further optimizing the cost.

The income tax being reduced by $750 million. The profit structure has been further optimized. The right-down corner will show you the weighted average return on equity. In other words, our REE continued to be optimized for 2024. The weighted average return on equity was 4.91%. So, compared with the revenues, profit margin, and also net profitable attributable to the owners of the company, the weighted average return on equity showed robust performance. Let's now move to slide 90. Slide 90 shows you the segment result. Segment result was just following what has been practiced here with very detailed discussions. The first one is the turbine business, as has been introduced, the WTG manufacturing and the sales. Altogether, the revenue was grown by $38.92 billion, and the GDP margin was also improving greatly. So in 2024, for WTG manufacturing and the sales, we made a profit margin of 4.9%. and this can demonstrate two things the offshore and the overseas turbine revenue continue to extend its revenue but at the same time you can also see that domestic onshore revenue slightly decreased so that's a reason the overall turbine gp margins be improved altogether increased by 5.43 percent and the second business The second reason is because of the energy development and energy storage development. So that's the reason our revenue continued to be extended. Our second business slide was the wind power department. The installation capacity we have already mentioned, but for the overall revenue of the wind power department, it was around 10.85 billion.

The profit margins decreased to 40%.

It used to be 47.3% last year. Because you see that the electricity price continues to go down, that's the reason the profit margin is being pressured. But generally speaking, the wind farm development has always been a business contributor to most of the duty margins of the company. The third segment is the wind power service. Our wind power capacity power service company capacity continued to be improved. It was 5.5 billion in 2024, used to be 5.2 billion in 2023. GP margin was 21.5%, used to be 90.8% in 2023. Our wind power service business structure continued to be improved. We also made some strategic construction of the business on the onshore and offshore and also domestic and overseas EPC businesses, especially the overseas EPC businesses. We continue to concentrate on the after-sales service market. The last part is environmental protection business for water treatment solution. The reason is because some of the water facilities, they have moved off the sheet. Some of them continue to improve the services, so you can see revenue and profit of the other business maintaining a good growth. Now coming next, let's go for slide 20, that is operation index. On the left side, we do show you the base of trade receivables. And you can also see the company's trade receivables totaled around 30.8 million, taking 20 of the total assets. The turnover days was 181 days. In 2025, the company is going to shorten the days of the trade receivables to further improve the efficiency and the collection efficiency. On the right side, we show you the days of the inventories, including the inventories and the contracted assets and the total assets. We see a very nice improvement being made. Because for our company, in our inventories, many of them are the power plants. If you purely deducting the impact of the power plant products over the inventory, then the ratio was only 7%. And also, the turnovers being pretty impressive, reaching 82 days, which is a nice improvement. And then let's now go for slide 20, that is the solvency position on the left side, that is interest-belling debt. You can see in Q1, Q2, interest-belling debt to our 2-2 debt continue to go down. In other words, debt structures seem further improved. So the ever-improving debt structure also showcasing our interest rate of the loans continue to be optimized. And we also continue to see that the company's reserve for the interest borrowing liabilities, that is the credit sales, will also be further improved. Especially last Friday, we got another credit. In other words, we will be able to sustain our future capitals for the daily operations. On the right side, we show you the asset liability ratio by the end of last year. The total asset liability ratio was 73.96%. Total asset was $155.2 billion. The ratio seems slightly improved by thesis because our business models are impacting the asset liability ratio. Asset liability ratio is a very important ratio to showcasing the healthy business of the company. We are working very hard to improving the assets and our business ratio. First of all, we optimize our business structures, trying to collect the payables into receivables, and then at the same time to make sure we continue to improve the efficiencies of the liquid assets, including the receivable efficiencies and further improving the reserve capital assets. And for the non-current asset, we are controlling the interest, borrowing, liabilities, cost control, and fee control. The final slide is regarding the equity assets. We do have the long-term strategies for our equities for the current company. So all in all, with effective measures and the rates being taken into consideration in 2025, we're going to further downsize the assets liability ratio. Next slide, 22. On the left side, we show you the cash and the total assets. The cash to total assets was 7.49%, where you can see in Q2, Q3, and Q4, we do see a nice reduction due to two reasons. First of all, the company continued to further improve the use of the stock funds, for example, continue to leveraging the tools to further improve its efficiency. And from the safety perspective, we also increased the securities and the equities. And at the same time, we have financing reserve that are ready for restore on quarterly basis. No less than 40 billions being ready for every quarter. Where on the right side, we also show you the net operating cash flow in millions. And the net operating cash flow totalled A very nice number. But at the same time, in Q3, we have a positive number, the same as Q4. So the full year operating cash flow is good in line with our expectation. So ladies and gentlemen, I show you the financials of the company in 2024.

Thank you. Okay. Ladies and gentlemen, all the investors, please allow me to also work you through the outlook of the company.

We can see these are the data from ARENA as well as the World Wind Energy Council. And we can also see that according to IEA, according to the existing power center condition, annual renewable capacity were forecast to reach 935 gigawatts in 2030, compared with 666 gigawatts in 2024. And the total global onshore wind power capacity additions is forecast to reach 846 gigawatts. On the right side, GWEC expert expects that the global new offshore wind installation will remain promising. So in the near future, a compound average growth rate would be 25% and 60% up to early 2030. New installation expected to exceed 40 gigawatts in 2099 and 60 gigawatts in 2032. Next slide. And according to IEA, China renewable energy capacity expand to be more than three gigawatts, tripling growth of the last five years . Solar PV and wind are forecasted to account for 97% of the renewable capacity additions in the next five years. On the right side, Wood Maxine forecasts China's new grid-connect offshore wind power capacity will reach or exceed 70. And just now, I already showed you what's been done in 2024. Looking to the future, the company will also be committed for the sustainable development with five major practice and practice areas. For example, with honest and compliant operations, we're going to continue to improve our management to mitigate the risk. Well, for the green and environmental-friendly operation, we're going to identify the climate change opportunities and risks, continue to decarbonize our business. On the right side, I show some key indicators. For example, by 2030, we have 100% of our global production operations will be powered by green electricity. But for this year, for the green power energy and carbon emissions, We are also going to show good improvement for further reductions. Starting from 2022, carbon neutrality at the operation level would be maintained, including Scope 1 and Scope 2. And also, for this year, we also established or disclosed our sustainable development report with Scope 3 being available. Well, regarding the sustainable industrial chain, we're not only divided by ourselves. We also need all the industrial peers for joint development. We're going to work with upstream and downstream for risk mitigations to support the overall industrial development. So for this year, we're going to continue with the green supply chain social responsibility projects, In 2025, our key suppliers are going to have 100% of the key products being produced by the green power. And I have already shared with you, and we have already started having the new material science engineering over the blade product. In 2040, all those products would be 100% recyclable and reusable. Regarding a fair and sound working environment, we are for serving a diverse, equitable, and inclusive working environment. House management programs will be provided for employees with the company. We're regarding the harmonious community relations. We're going to work with the community we're operating in for the mutual and sustainable development. Ladies and gentlemen, here comes to the end of today's presentation and the prepared remarks. according to the regulation of the Chinese regulator. We are going to share with you our market value or market cap management regulation. Let me just work you through the background. By the end of last year, the China Security Regulatory Committee has already released the No. 10 document asking all the listed companies to well manage its market cap. I'm not going to take too much of your time. This market value management regulation has already been disclosed last Friday night, along with our performance report. And we have followed the rules and regulations to further improve our market value and market cap, continue to improve our business operations, improving the value of investment and return back to the shareholders, and also help to mitigate some issues non-compliant practice for the market value management. The fundamental principle is to be compliant, to be scientific, and also to be honest and trustworthy. And within our market value management, we're going to have the board chairperson and the senior managers and board directors to be a part of this management process. And our chairmen and senior management were participating in the investment activities to improve the company's capital market value and our book factories were helped to take care of the IR relationships, data disclose and media coverage management. For the market value management, we focused on our key business, improving operational efficiency, profitability and also considering other possible ways, for example, the margin acquisition equities, the cash incentives. And we're also going to share with you some of the ways of further avoiding the internal information leakage. And the company will also keep an eye on the market shares, the PE ratios, as well as other ratios for the alerting system and the arrangements. So we're fundamentally following what has been proposed by the regulators in Document 10. to well perform our remarketed value management work.