Soochow Securities Company Limited has released a research report stating that for the offshore wind sector, installation certainty for 2026 is increasing. This, combined with the advancement of deep-sea projects and the release of overseas demand, is expected to drive a synchronized recovery in industry chain profitability and valuations. For the onshore wind sector, price-increase orders are gradually being delivered, offering significant profit elasticity for wind turbine manufacturers.
The firm recommends: 1) Tower and pile foundation companies, where domestic profit inflection points have arrived and overseas orders can unlock higher profit ceilings; 2) Submarine cable companies, where deep-sea developments increase unit value, and barriers for 500kV and flexible DC cables are strengthening, allowing leaders to maintain dominance; 3) Complete wind turbine manufacturers, where profit inflection points are gradually appearing, and overseas markets and new business lines are opening up growth space.
Key Insights from Soochow Securities
The firm sees a resonance in installation demand for both onshore and offshore wind in 2026, with a positive outlook for the "two seas" (offshore and deep-sea) growth potential. From January to June 2026, China's new wind power installations totaled 38.6GW, a year-on-year decrease of 24.9%; installations in January and February alone were 11.04GW. For onshore wind, following the implementation of Document No. 136, electricity prices for new energy stations have fully entered the market, leading to a decline in both wind and solar photovoltaic stations. It is estimated that onshore wind installations in 2026 will be flat year-on-year, with annual installations of 110-120GW supported during the "Fifteenth Five-Year Plan" period. For offshore wind, a deep-sea planning policy is imminent, and issues around military sea use are being clarified. Offshore wind installations for 2026 are estimated at 8-10GW, representing 30% year-on-year growth, with the potential to increase to an annual average of 15GW during the "Fifteenth Five-Year Plan" period.
Resonance from Deep-Sea and Overseas Markets as European Offshore Wind Plans Intensify
Domestically, the "Fifteenth Five-Year Plan" for the first time explicitly outlines the construction of offshore wind power bases, marking the entry of deep-sea development into a policy implementation phase. The National Energy Administration and other departments are promoting a three-year action plan for offshore wind power, aiming to advance approximately 80GW of offshore wind projects over the next three years. Combined with the first batch of deep-sea demonstration projects of about 21GW and reserved sites of about 100GW, this will drive a total development scale exceeding 100GW. Project progress is active in regions like Zhejiang, Shandong, and Hainan.
Internationally, although the short-term grid connection pace for European offshore wind is weak, with only about 2GW of new connections in 2025, cumulative installed capacity has neared 39GW. Various countries have set a combined offshore wind target of over 150GW by 2030. From 2018 to 2025, the cumulative Final Investment Decision (FID) for European offshore wind was about 36GW, with approximately 22GW of already-decided projects awaiting grid connection. As the Contract for Difference (CfD) mechanism is promoted and projects with completed FIDs enter the construction phase, installation growth rates are expected to improve significantly from 2026 onwards. Meanwhile, onshore wind demand in emerging markets like Africa, the Middle East, India, and Latin America is growing rapidly. According to forecasts from the Global Wind Energy Council (GWEC), new onshore wind installations in these regions will grow from 17GW in 2025 to 41.8GW by 2030, a compound annual growth rate of about 19.7% from 2025 to 2030. Global wind power demand is expected to maintain a high level of prosperity. Europe and these emerging markets still rely on China's industrial chain for critical pain points such as cost reduction, turbine supply, and floating foundations.
Submarine Cables: Increasing Voltage Levels Strengthen the Leading Companies' Pattern
As offshore wind installations increase, the distance from shore grows, and the share of ultra-high voltage submarine cables rises, China's submarine cable market is estimated to be about 70 billion yuan in 2025, a 6.5% year-on-year increase. It is expected to reach 96 billion yuan by 2026E and approximately 240 billion yuan by 2030E, with a compound annual growth rate of about 28%. Based on bid opening results, the gross profit margin for 220kV submarine cables is generally stable at 35-40%, while the recently opened bids for 500kV AC and ±500kV flexible DC submarine cables maintain a high gross profit margin of 45-55%. In terms of orders, as of the fourth quarter of 2025, the leading companies Ningbo Orient Wires & Cables Co., Ltd. and Zhongtian Technology Group Co., Ltd. held submarine cable orders of 117 billion and 121 billion yuan, respectively, with their order books continuously replenished. The supply-demand gap in the overseas submarine cable market is significant, with Ningbo Orient and Zhongtian Technology being the first to secure overseas main cable orders, presenting export opportunities for Chinese companies.
Tower and Pile Foundations: Domestic Profit Inflection Point, International Expansion Opens a Ceiling
Domestically, processing fees for towers and pile foundations are essentially at their bottom. With the ramp-up of offshore wind in 2026 driving up capacity utilization, companies are expected to see upward elasticity in per-ton net profit. Internationally, European monopile production capacity is constrained. It is estimated that the actual available local capacity is less than 1 million tons in 2026, while demand is about 1.5 million tons. This suggests that orders may spill over to Chinese companies. Furthermore, the price of medium plate steel in China is significantly lower than in Europe, and combined with delivery efficiency advantages, the growth space is promising.
Wind Turbines: Stabilizing Prices and Improving Profitability in 2026, with Overseas Elasticity
The winning bid price for onshore wind turbines in 2025 has risen by over 5% from its bottom. Bid opening prices in 2026 have largely stabilized. Turbine manufacturers are continuously absorbing cost pressures through the iteration of large-capacity models and supply chain cost reduction. The manufacturing segment's gross profit margin improved quarter-over-quarter from 2025 to the first quarter of 2026. It is estimated that domestic profitability in 2026 will stabilize and recover, with the manufacturing segment gradually moving towards a turnaround. In overseas markets, orders and deliveries increased significantly in 2025. The gross profit margin for overseas business is 5-10 percentage points higher than domestically, suggesting that the overseas market will bring substantial profit increments.
Wind Turbine Components: Slowing Large-Scale Trend, Stable Prices, and Profit Recovery Ahead
In 2025, the pace of wind turbine upscaling has noticeably slowed. The supply-demand balance for large castings and precision machining components is tight, and the profitability of casting companies is steadily recovering. Prices are expected to stabilize in 2026. For blades, driven by price increases for raw materials such as epoxy resin, blade prices rose by 5-10% in 2025, and there is still room for a 5-6% price increase in 2026. For gearboxes, while unit prices see a slight annual decline, the profitability of leading companies remains strong. Additionally, industry leaders are accelerating capacity expansion and actively developing export businesses, which supports profit repair.
Risk Warning
Risks include intensified competition, unexpected policy changes, new installations falling short of expectations, and fluctuations in raw material prices.