Xinjiang Goldwind shares fall on disappointing results
April 28, 2011 Category Alternative energy, Environment
Shares in Xinjiang Goldwind Science & Technology, the second-largest wind turbine maker in China, plunged 11.8% on April 20 after it posted disappointing first-quarter results and warned that first-half profit may fall by up to half. The company reported a net first-quarter profit of CNY206.19 million, down 17% from the same period last year, while sales edged up 0.04% to CNY1.86 billion. It projected first-half net profit would decrease by “no more than 50%” compared to an interim profit of CNY772.75 million last year. “Company operations are expanding, sales growth remains stable, but the wind turbine generators’ average selling price has decreased significantly,” it said in a statement. Excluding non-recurring items like impairment and fair value changes in assets, and investment income and gains, core operating profit dropped 65.4% to CNY110.31 million. A JP Morgan report estimated the company made a gain of between CNY140 million and CNY150 million from the disposal of wind farms in the quarter. JP Morgan Analyst Boris Kan expected selling price falls to continue, given that market leader Sinovel is likely to continue to expand production capacity and smaller producers showed no signs of exiting the overcrowded industry. Only a handful of the more than 80 players are expected to survive in the long term. Overcapacity and intense competition saw Goldwind’s average selling price fall to between CNY3,500 and CNY3,600 per kilowatt from CNY4,750 in last year’s second half.
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