THIS MATERIAL IS A MARKETING COMMUNICATION.
China’s wind turbine manufacturing ecosystem and its potential
China is the world’s leader in wind power generation, with the largest installed capacity of any nation and continued rapid growth in new wind facilities. With its large landmass and long coastline, China has exceptional wind power resources: it is estimated China has about 2500GW of exploitable capacity on land and 200GW at sea. China is forecast to have 250GW of wind capacity by 2020 as part of the government’s pledge to produce 15 percent of all electricity from renewable resources by that year. The Chinese government has set out a road map for wind power up to 2050. Wind power capacity goals are to reach 400GW by 2030 and 1,000GW by 2050, respectively.
According to Wood Mackenzie1, global wind power capacity additions are expected to maintain at 77GW annually from 2020-2029, representing 112% growth in global installed capacity over the next ten years. Although the coronavirus is expected to impact the capacity additions for 2020 and 2021, the need to comply with long-term energy and climate targets should result in makeup orders after the Covid-19 shock. The EU, Middle East, Africa, and Asia will continue to be key growth drivers, while the US remains uncertain, depending on political leadership.
The value chain of wind turbine original equipment manufacturer (OEM) consists of the wind turbine (nacelle, rotor, tower), cables (array and export cables), structural components such as tower foundations, and electrical components (onshore substation, batteries, offshore substation).
Wind turbines are mostly manufactured by global specialist capital goods companies. The top-three turbine manufacturers by installed capacity are Vestas, Goldwind, and GE. The market for turbine manufacturing is consolidated with the top three players, accounting for nearly 50% of global installed capacity. However, the rest of the market is highly fragmented, with several smaller players such as Siemens Gamesa, Envision, Enercon, Ming Yang, Nordexand other Chinese players competing for a piece of the pie.
A key component of the turbine is the blades, which are often manufactured by specialist manufacturers but can also be produced in-house by turbine OEMs. Globally, the blade market is highly fragmented, with several Chinese players jostling for a small share of the market, such as Sinomatech Wind Power Blade, Zhuzhou Times New Material Tech, etc. Turbine OEMs such as GE, Vestas, and Siemens Gamesa all source their blades internally.
The nacelle, or engine, is another core part of the wind turbine. Nacelle manufacturers produce everything under the hood of a wind turbine, such as the generator, gearbox, drive train, and brake assembly. The nacelle manufacturing space is even more fragmented than blade manufacturing, but with a significant presence of Chinese companies. However, the majority of the market is still controlled by the integrated turbine manufacturers such as Vestas, Siemens Gamesa, GE, and other large players. Outside the leading international companies, Chinese firms such as Shanghai Electric, Guangdong Mingyang, China Creative Wind Energy, Sinovel Wind etc. are the next in terms of scale.
As we have shown, Chinese companies within the wind turbine manufacturing value chain have good opportunities to grow faster than the market by virtue of China’s strong domestic demand and penetration into the supply chains of global OEMs. At the same time, countries are increasingly shifting towards wind power as a sustainable form of alternative energy. We believe the Chinese companies have a cost advantage over foreign competitors while their technology is continuously improving. For example, Chinese companies like Titan Wind and Weihai Guangwei have been gaining market share within Vesta’s value chain. Titan Wind has positioned itself as a supplier of wind towers to global turbine manufacturers since its founding in 2005. It supplies more than 10% of Vestas’ wind tower requirements while also increasing its market share at GE and Siemens. Guangwei is a leading carbon fiber producer in China and supplies Vestas with its production of wind turbine blades.
The mentioned companies are strictly for educational and fund marketing purposes only. For more information on our product offering, please refer to our website.
Disclaimer
This document is intended for Hong Kong investors only. This material is neither an offer to sell nor solicitation to buy a security to any person in any jurisdiction where such solicitation, offer, purchase or sale would be unlawful under the laws of that jurisdiction. Investment involves risk.
The information in this material is based on sources we believe to be reliable but we do not guarantee the accuracy of completeness of the information provided. This material has not been reviewed by SFC and shall only be circulated in countries where it is permitted.
This material is intended solely for your private use and shall not be reproduced or recirculated either in whole or in part, without the written permission of Mirae Asset Global Investments. This document has been prepared for presentation, illustration and discussion purposes only and is not legally binding. Whilst compiled from sources Mirae Asset Global Investments believes to be accurate, no representation, warranty, assurance or implication to the accuracy, completeness or adequacy from defect of any kind is made. The division, group, subsidiary or affiliate of Mirae Asset Global Investments which produced this document shall not be liable to the recipient or controlling shareholders of the recipient resulting from its use. The views and information discussed or referred in this report are as of the date of publication, are subject to change and may not reflect the current views of the writer(s). The views expressed represent an assessment of market conditions at a specific point in time, are to be treated as opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. In addition, the opinions expressed are those of the writer(s) and may differ from those of other Mirae Asset Global Investments’ investment professionals.
The provision of this document shall not be deemed as constituting any offer, acceptance, or promise of any further contract or amendment to any contract which may exist between the parties. The issuer of this article is Mirae Asset Global Investments (HK) Limited (“we”) which we may or our managed funds may hold the mentioned securities. It should not be distributed to any other party except with the written consent of Mirae Asset Global Investments. Nothing herein contained shall be construed as granting the recipient whether directly or indirectly or by implication, any license or right, under any copy right or intellectual property rights to use the information herein. This document may include reference data from third-party sources and Mirae Asset Global Investments has not conducted any audit, validation, or verification of such data. Mirae Asset Global Investments accepts no liability for any loss or damage of any kind resulting out of the unauthorized use of this document. Investment involves risk. Past performance figures are not indicative of future performance. Forward-looking statements are not guarantees of performance. The information presented is not intended to provide specific investment advice. Please carefully read through the offering documents and seek independent professional advice before you make any investment decision. Products, services, and information may not be available in your jurisdiction and may be offered by affiliates, subsidiaries, and/or distributors of Mirae Asset Global Investments as stipulated by local laws and regulations. Please consult with your professional adviser for further information on the availability of products and services within your jurisdiction.
Hong Kong: This material is prepared by Mirae Asset Global Investments (HK) Limited (Mirae HK). Mirae HK is regulated by the SFC (CE reference: ALK083).
Australia: The information contained on this document is provided by Mirae Asset Global Investments (HK) Limited (“MAGIHK”), which is exempt from the requirement to hold an Australian financial services license under the Corporations Act 2001 (Cth) (Corporations Act) pursuant to ASIC Class Order 03/1103 (Class Order) in respect of the financial services it provides to wholesale clients (as defined in the Corporations Act) in Australia. MAGIHK is regulated by the Securities and Futures Commission of Hong Kong under Hong Kong laws, which differ from Australian laws. Pursuant to the Class Order, this document and any information regarding MAGIHK and its products is strictly provided to and intended for Australian wholesale clients only. By accessing this document and any information or content contained in it, you represent that you are a ‘wholesale client’ under the Corporations Act. This document is strictly for information purposes only and does not constitute a representation that any investment strategy is suitable or appropriate for an investor’s individual circumstances. Further, this document should not be regarded by investors as a substitute for independent professional advice or the exercise of their own judgement. The contents of this document is prepared and maintained by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Australian Investments & Securities Commission. No part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission of MAGI HK. Copyright 2020. All rights reserved.
China’s wind turbine manufacturing ecosystem and its potential
China is the world’s leader in wind power generation, with the largest installed capacity of any nation and continued rapid growth in new wind facilities. With its large landmass and long coastline, China has exceptional wind power resources: it is estimated China has about 2500GW of exploitable capacity on land and 200GW at sea. China is forecast to have 250GW of wind capacity by 2020 as part of the government’s pledge to produce 15 percent of all electricity from renewable resources by that year. The Chinese government has set out a road map for wind power up to 2050. Wind power capacity goals are to reach 400GW by 2030 and 1,000GW by 2050, respectively.
According to Wood Mackenzie1, global wind power capacity additions are expected to maintain at 77GW annually from 2020-2029, representing 112% growth in global installed capacity over the next ten years. Although the coronavirus is expected to impact the capacity additions for 2020 and 2021, the need to comply with long-term energy and climate targets should result in makeup orders after the Covid-19 shock. The EU, Middle East, Africa, and Asia will continue to be key growth drivers, while the US remains uncertain, depending on political leadership.
The value chain of wind turbine original equipment manufacturer (OEM) consists of the wind turbine (nacelle, rotor, tower), cables (array and export cables), structural components such as tower foundations, and electrical components (onshore substation, batteries, offshore substation).
Wind turbines are mostly manufactured by global specialist capital goods companies. The top-three turbine manufacturers by installed capacity are Vestas, Goldwind, and GE. The market for turbine manufacturing is consolidated with the top three players, accounting for nearly 50% of global installed capacity. However, the rest of the market is highly fragmented, with several smaller players such as Siemens Gamesa, Envision, Enercon, Ming Yang, Nordexand other Chinese players competing for a piece of the pie.
A key component of the turbine is the blades, which are often manufactured by specialist manufacturers but can also be produced in-house by turbine OEMs. Globally, the blade market is highly fragmented, with several Chinese players jostling for a small share of the market, such as Sinomatech Wind Power Blade, Zhuzhou Times New Material Tech, etc. Turbine OEMs such as GE, Vestas, and Siemens Gamesa all source their blades internally.
The nacelle, or engine, is another core part of the wind turbine. Nacelle manufacturers produce everything under the hood of a wind turbine, such as the generator, gearbox, drive train, and brake assembly. The nacelle manufacturing space is even more fragmented than blade manufacturing, but with a significant presence of Chinese companies. However, the majority of the market is still controlled by the integrated turbine manufacturers such as Vestas, Siemens Gamesa, GE, and other large players. Outside the leading international companies, Chinese firms such as Shanghai Electric, Guangdong Mingyang, China Creative Wind Energy, Sinovel Wind etc. are the next in terms of scale.
As we have shown, Chinese companies within the wind turbine manufacturing value chain have good opportunities to grow faster than the market by virtue of China’s strong domestic demand and penetration into the supply chains of global OEMs. At the same time, countries are increasingly shifting towards wind power as a sustainable form of alternative energy. We believe the Chinese companies have a cost advantage over foreign competitors while their technology is continuously improving. For example, Chinese companies like Titan Wind and Weihai Guangwei have been gaining market share within Vesta’s value chain. Titan Wind has positioned itself as a supplier of wind towers to global turbine manufacturers since its founding in 2005. It supplies more than 10% of Vestas’ wind tower requirements while also increasing its market share at GE and Siemens. Guangwei is a leading carbon fiber producer in China and supplies Vestas with its production of wind turbine blades.
The mentioned companies are strictly for educational and fund marketing purposes only. For more information on our product offering, please refer to our website.
Disclaimer
This document is intended for Hong Kong investors only. This material is neither an offer to sell nor solicitation to buy a security to any person in any jurisdiction where such solicitation, offer, purchase or sale would be unlawful under the laws of that jurisdiction. Investment involves risk.
The information in this material is based on sources we believe to be reliable but we do not guarantee the accuracy of completeness of the information provided. This material has not been reviewed by SFC and shall only be circulated in countries where it is permitted.
This material is intended solely for your private use and shall not be reproduced or recirculated either in whole or in part, without the written permission of Mirae Asset Global Investments. This document has been prepared for presentation, illustration and discussion purposes only and is not legally binding. Whilst compiled from sources Mirae Asset Global Investments believes to be accurate, no representation, warranty, assurance or implication to the accuracy, completeness or adequacy from defect of any kind is made. The division, group, subsidiary or affiliate of Mirae Asset Global Investments which produced this document shall not be liable to the recipient or controlling shareholders of the recipient resulting from its use. The views and information discussed or referred in this report are as of the date of publication, are subject to change and may not reflect the current views of the writer(s). The views expressed represent an assessment of market conditions at a specific point in time, are to be treated as opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. In addition, the opinions expressed are those of the writer(s) and may differ from those of other Mirae Asset Global Investments’ investment professionals.
The provision of this document shall not be deemed as constituting any offer, acceptance, or promise of any further contract or amendment to any contract which may exist between the parties. The issuer of this article is Mirae Asset Global Investments (HK) Limited (“we”) which we may or our managed funds may hold the mentioned securities. It should not be distributed to any other party except with the written consent of Mirae Asset Global Investments. Nothing herein contained shall be construed as granting the recipient whether directly or indirectly or by implication, any license or right, under any copy right or intellectual property rights to use the information herein. This document may include reference data from third-party sources and Mirae Asset Global Investments has not conducted any audit, validation, or verification of such data. Mirae Asset Global Investments accepts no liability for any loss or damage of any kind resulting out of the unauthorized use of this document. Investment involves risk. Past performance figures are not indicative of future performance. Forward-looking statements are not guarantees of performance. The information presented is not intended to provide specific investment advice. Please carefully read through the offering documents and seek independent professional advice before you make any investment decision. Products, services, and information may not be available in your jurisdiction and may be offered by affiliates, subsidiaries, and/or distributors of Mirae Asset Global Investments as stipulated by local laws and regulations. Please consult with your professional adviser for further information on the availability of products and services within your jurisdiction.
Hong Kong: This material is prepared by Mirae Asset Global Investments (HK) Limited (Mirae HK). Mirae HK is regulated by the SFC (CE reference: ALK083).
Australia: The information contained on this document is provided by Mirae Asset Global Investments (HK) Limited (“MAGIHK”), which is exempt from the requirement to hold an Australian financial services license under the Corporations Act 2001 (Cth) (Corporations Act) pursuant to ASIC Class Order 03/1103 (Class Order) in respect of the financial services it provides to wholesale clients (as defined in the Corporations Act) in Australia. MAGIHK is regulated by the Securities and Futures Commission of Hong Kong under Hong Kong laws, which differ from Australian laws. Pursuant to the Class Order, this document and any information regarding MAGIHK and its products is strictly provided to and intended for Australian wholesale clients only. By accessing this document and any information or content contained in it, you represent that you are a ‘wholesale client’ under the Corporations Act. This document is strictly for information purposes only and does not constitute a representation that any investment strategy is suitable or appropriate for an investor’s individual circumstances. Further, this document should not be regarded by investors as a substitute for independent professional advice or the exercise of their own judgement. The contents of this document is prepared and maintained by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Australian Investments & Securities Commission. No part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission of MAGI HK. Copyright 2020. All rights reserved.
Disclaimer & Information for Investors
No distribution, solicitation or advice: This document is provided for information and illustrative purposes and is intended for your use only. It is not a solicitation, offer or recommendation to buy or sell any security or other financial instrument. The information contained in this document has been provided as a general market commentary only and does not constitute any form of regulated financial advice, legal, tax or other regulated service.
The views and information discussed or referred in this document are as of the date of publication. Certain of the statements contained in this document are statements of future expectations and other forward-looking statements. Views, opinions and estimates may change without notice and are based on a number of assumptions which may or may not eventuate or prove to be accurate. Actual results, performance or events may differ materially from those in such statements. In addition, the opinions expressed may differ from those of other Mirae Asset Global Investments’ investment professionals.
Investment involves risk: Past performance is not indicative of future performance. It cannot be guaranteed that the performance of the Fund will generate a return and there may be circumstances where no return is generated or the amount invested is lost. It may not be suitable for persons unfamiliar with the underlying securities or who are unwilling or unable to bear the risk of loss and ownership of such investment. Before making any investment decision, investors should read the Prospectus for details and the risk factors. Investors should ensure they fully understand the risks associated with the Fund and should also consider their own investment objective and risk tolerance level. Investors are advised to seek independent professional advice before making any investment.
Sources: Information and opinions presented in this document have been obtained or derived from sources which in the opinion of Mirae Asset Global Investments (“MAGI”) are reliable, but we make no representation as to their accuracy or completeness. We accept no liability for a loss arising from the use of this document.
Products, services and information may not be available in your jurisdiction and may be offered by affiliates, subsidiaries and/or distributors of MAGI as stipulated by local laws and regulations. Please consult with your professional adviser for further information on the availability of products and services within your jurisdiction. This document is issued by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Securities and Futures Commission.
Information for EU investors pursuant to Regulation (EU) 2019/1156: This document is a marketing communication and is intended for Professional Investors only. A Prospectus is available for the Mirae Asset Global Discovery Fund (the “Company”) a société d'investissement à capital variable (SICAV) domiciled in Luxembourg structured as an umbrella with a number of sub-funds. Key Investor Information Documents (“KIIDs”) are available for each share class of each of the sub-funds of the Company.
The Company’s Prospectus and the KIIDs can be obtained from www.am.miraeasset.eu/fund-literature . The Prospectus is available in English, French, German, and Danish, while the KIIDs are available in one of the official languages of each of the EU Member States into which each sub-fund has been notified for marketing under the Directive 2009/65/EC (the “UCITS Directive”). Please refer to the Prospectus and the KIID before making any final investment decisions.
A summary of investor rights is available in English from www.am.miraeasset.eu/investor-rights-summary.
The sub-funds of the Company are currently notified for marketing into a number of EU Member States under the UCITS Directive. FundRock Management Company can terminate such notifications for any share class and/or sub-fund of the Company at any time using the process contained in Article 93a of the UCITS Directive.
Australia: The information contained in this document is provided by Mirae Asset Global Investments (HK) Limited (“MAGIHK”), which is exempted from the requirement to hold an Australian financial services license under the Corporations Act 2001 (Cth) (Corporations Act) pursuant to ASIC Class Order 03/1103 (Class Order) in respect of the financial services it provides to wholesale clients (as defined in the Corporations Act) in Australia. MAGIHK is regulated by the Securities and Futures Commission of Hong Kong under Hong Kong laws, which differ from Australian laws. Pursuant to the Class Order, this document and any information regarding MAGIHK and its products is strictly provided to and intended for Australian wholesale clients only. The contents of this document is prepared by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Australian Investments & Securities Commission.
Copyright 2021. All rights reserved. No part of this document may be reproduced in any form, or referred to in any other publication, without express written permission of Mirae Asset Global Investments (Hong Kong) Limited.