Net earnings in 2020 jumped YoY by 34.9% to RMB2,844 mn. Sales and net profit of Goldwind in 2020 went up YoY by 48.2% and 34.9% to RMB56,146 mn and RMB2,844 mn （net of perpetual notes expenses）， respectively. Approximately 12.93 GW （+58.3% YoY） of wind turbines were sold externally in 2020, with a blended ASP of RMB3.6 per watt （+2.2% YoY）。 Wind turbine gross margin in 2020 went up YoY by 2.0 ppt to 147%, wherein domestic market wind turbine gross margin recovered to 15,3%. Consolidated gross margin in 2020 dropped 1.2 ppt YoY to 17.2% but is expected to rebound amid continued margin recovery on wind turbines and the wind power services segment returning to profit in 2021.
　　We expect domestic power engineering spending in 2021 to be no less than RMB600 bn. Wind power engineering investment in 1M-2M2021 reached RMB17.1 bn, up YoY by 109.7%; newly installed wind capacity in 1M-2M2021 hit 3.57 GW, up YoY by 261% or YoY increment of 2.58 GW. We expect investment on power engineering in 2021 to be RMB600 bn to RMB700 bn, with approximately 90% to be spent on non-fossil fuel power sources. Wind energy accounted for nearly half of total spending on power engineering in 2020 and is expected to play a significant role in 2021.
　　Reiterate the investment rating of "Buy" but adjust our TP to HK$19.10. We believe that Goldwind will be the biggest winner from the surging wind power investment in China under the carbon neutrality national strategy. Our new TP corresponds to 20.0x/ 18.8x/ 17.7x 2021 to 2023 PER or 1.9x/ 1.7x/ 1.6x 2021 to 2023 PBR.