The Zhitong Finance App learned that Guolian Securities released a research report saying that the first quarterly report was gradually disclosed. Subsequent catalytic savings in the first quarter were generally off-season for ocean breeze construction. With the gradual disclosure of the 24Q1 quarterly report, short-term risks or releases, the main future core catalysts are: 1) recovery on the construction side; 2) tendering is picking up; 3) Guangdong Haifeng's progress is marginal. Previously, the wind power sector was at a relative bottom in a phased manner. As deliveries and tenders began, industry sentiment was on the rise in reverse.

The main views of Guolian Securities are as follows:

Construction side: Gradually entering the accelerated construction period, Q2 production and delivery are expected to pick up

The first quarter is generally a low construction season for the industry. Looking forward to 24Q2. As seabreeze from various regions gradually enters the construction period, key seabreeze projects in the Jiangsu/Guangdong region may gradually begin. We expect the Q2 seafreeze industry chain production and delivery schedule to improve month-on-month, and the installed demand is expected to gradually be fulfilled. On a year-on-year basis, we expect the new domestic seafreeze installed capacity to reach 10 GW in 24, achieving a high increase over the previous year.

Tendering side: Seabreeze tenders are expected to pick up

The 24Q1 seabreeze tender was 1.2 GW. The trend was picking up in April. Since April '24, domestic offshore fan and EPC general contracting tenders have reached 1.85 GW, an increase of 163% over the previous year. Guolian Securities pointed out that at this stage, the scale of the seabreeze project that has been approved in China but has not been tendered by the fan or EPC general contract is about 10GW. Seabreeze tenders are expected to pick up further in May-June, catalyzing the order situation of related companies; on a yearly basis, domestic seabreeze tenders are expected to reach 12-15 GW, and future seabreeze demand is expected to be gradually released.

The Guangdong Seabreeze Project is progressing marginally

The Three Gorges Qingzhou 5/6/7 and CGN Fanshi 1/2 waterway issues are key factors limiting the development of offshore wind power in Guangdong, and also led to a decline in the scale of offshore wind power tenders in Guangdong in 2023. On April 26, Guangdong CGN Fanshi 2 launched a fan tender, requiring delivery of no less than 240MW by April '25, and the delivery of all bids by June '25. According to the League of Nations Securities, the Guangdong waterway problem is improving marginally. It is expected that construction of the project is expected to commence within the year, and related submarine cable and fan infrastructure companies are expected to take the lead in benefiting.

Investment advice

Sentiment is on the upside. I am optimistic that the submarine cable and seabreeze infrastructure is expected to reverse as seabreeze production is scheduled to be delivered and tenders begin. Recommendations: 1) In the submarine cable sector, as domestic offshore distance increases and project capacity increases, technical barriers are expected to further increase. Oriental Cable (603606.SH) and Zhongtian Technology (600522.SH) are recommended. 2) The sea-tower/pile link is expected to be the first to benefit from domestic offshore wind power demand. Haili Wind Power (301155.SZ), Taisheng Wind Energy (300129.SZ), and Daikin Heavy Industries (002487.SZ) are recommended.

Risk warning: Seabreeze demand falls short of expectations, raw material prices fluctuate, industry competition intensifies