Net earnings in 2021 went up 17.1% YoY, missing expectation. Revenue of Goldwind in 2021 dropped 10.2% YoY to RMB50,416 mn but net profit was up by 17.1% YoY to RMB3,332 mn (net of perpetual notes expenses).Approximately 10,683 MW (-17.4% YoY) of wind turbines were sold externally in 2021 with a blended ASP of RMB3.64 per watt (+7.1% YoY) amid rise in the sales mix of larger wind turbines (i.e. 3S/4S and 6S/8S). The gross margin of wind turbines (excluding components) reached 18.0%, up YoY by 3.4 ppt.With wind power services having returned to profit during the period and the higher margin on wind turbines, consolidated gross margin of Goldwind in 2021 went up 5.0 ppt YoY to 22.2% and net margin climbed 1.6 ppt YoY to 6.9%. Orders backlog at the end of 2021 reached 17.4 GW (+6.1% YoY).
　　Domestic newly installed wind capacity in 2022 is projected to be no less than 50 GW. China’s newly installed wind capacity in 2021 reached 47.6 GW, down 34.0% YoY. Cumulative installed wind capacity nationwide at the end of 2021 reached 328.5 GW, up 16.6% YoY. Further, the public tender market for wind power in the domestic market reached 54.15 GW in 2021, up by 74.1% YoY. The recovery in the wind power tender volume is refueling the growth momentum of wind power installations in China from 2022 and onwards. Under our new forecast, we expect newly installed wind capacity in China from 2022 to 2024 to be 55 GW/ 58 GW/ 60 GW, respectively.
　　We reiterate the "Buy" rating for Goldwind but adjust our TP to HK$17.10. The new TP corresponds to 15.7x/ 15.4x/ 15.0x 2022 to 2024 PER or 1.5x/ 1.4x/ 1.3x 2022 to 2024 PBR.