FAST NEWS: Xinjiang Goldwind Posts Strong Profit Growth, But Revenue Decline, in First Quarter

The latest: Wind power equipment maker Xinjiang Goldwind Science & Technology Co. Ltd. (2208.HK; 002202.SZ) said late Tuesday its revenue fell 8.3% in the first quarter of 2022 to 6.4 billion yuan ($962 million). But its profit for the period rose 15.3% to 1.3 billion yuan.

Looking Up: Despite the year-on-year revenue decline, the company’s cash flow from the sale of goods and services rose by 8.4% to 8.2 billion yuan from 7.6 billion yuan in the first quarter of 2021.

Take Note: The profit increase may have come largely from investment income, which more than doubled to 1.3 billion yuan during the quarter compared with 581 million yuan in the year-ago period.

Digging Deeper: Xinjiang Goldwind is one of the world’s leading makers of wind power generation equipment, making it a favorite of big global investors like BlackRock, Citigroup and JPMorgan. The company’s revenue fell by 10% last year from 2020 levels, though its gross profit margin improved notably for the year as it focused on large wind turbines that are typically more profitable. As a result, its profit last year rose 18% to 3.5 billion yuan from 3 billion yuan in 2020. The company made headlines earlier this month when it announced a massive new investment worth nearly $3 billion to develop a deep-sea wind power base with the affluent city of Wenzhou in East China’s Zhejiang province.

Market Reaction: Xinjiang Goldwind’s Hong Kong-listed shares were up nearly 3% late in the Wednesday trading day, while its Shenzhen-listed shares rose by an even stronger 6%. Still, the stock now trades near the bottom of its 52-week range.

Reporting by Doug Young

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