UBS: Raises Goldwind Science & Technology (02208) target price to 26.9 Hong Kong dollars with a "buy" rating.

UBS released a research report stating that they have lowered Goldwind Science & Technology's (02208) earnings forecast per share for 2026 to 2028 by 10% to 18%, mainly due to a decrease in profitability in the wind farm business and short-term gross margin pressure from the conflict in the Middle East. They have raised the target price from HK$25 to HK$26.9, equivalent to a forecasted P/E ratio of 10 times for the wind turbine business in 2027 and a doubling of the P/B ratio for the wind power business, maintaining a "buy" rating. Goldwind Science & Technology's performance in the fourth quarter of last year was lower than expected due to impairment losses, but the outlook for the wind turbine business remains optimistic. The net profit for the full year last year was 2.8 billion yuan, a year-on-year increase of 49%; the net profit in the fourth quarter was 190 million yuan, a year-on-year increase of 178%, but a quarter-on-quarter decrease of 83%, below market expectations, mainly due to an impairment loss of 1.1 billion yuan in the wind farm business. The bank said that benefiting from the anti "involution" trend in the wind power industry driving up average selling prices, as well as an increase in overseas shipments, the gross margin last year was 8.95%, an increase of 3.9 percentage points year-on-year. Although the conflict in the Middle East has caused short-term fluctuations in overseas shipping and raw material costs, putting pressure on this year's gross margin, the bank predicts that the gross margin for 2027 to 2030 could reach 12% to 15%, maintaining an optimistic outlook for the long-term gross margin prospects.