UBS raised its price target for Goldwind (02208.HK) to HKD 26.9 from HKD 25, maintaining its 'Buy' rating on an optimistic long-term outlook for the company's turbine business.
The bank's positive view persists even as Goldwind's fourth-quarter net profit of RMB 190 million fell short of market expectations. The miss was primarily driven by a RMB 1.1 billion impairment loss within its wind farm division, which caused profits to decline 83% from the prior quarter.
For the full year, Goldwind's net profit rose 49% to RMB 2.774 billion. UBS noted that the company's gross profit margin expanded by 3.9 percentage points to 8.95% last year, aided by higher average selling prices and increased overseas shipments. However, the bank lowered its EPS forecasts for 2026-2028 by 10% to 18%, acknowledging short-term margin pressure from the Middle East conflict affecting shipping and material costs.
The new HKD 26.9 target is based on a 10x price-to-earnings ratio for the wind turbine business and a 2x price-to-book ratio for the wind power generation business in 2027. UBS projects that Goldwind's gross profit margin could recover and expand to between 12% and 15% from 2027 to 2030.
The maintained 'Buy' rating suggests UBS believes the long-term growth trajectory, particularly in overseas markets, outweighs the short-term profitability challenges. Investors will be watching for margin improvements in upcoming quarters as a key indicator of this thesis playing out.
This article is for informational purposes only and does not constitute investment advice.
