Letter from the Chairman

Wu Gang
Chairman

Dear Shareholders,

On behalf of the Board, I present to you Goldwind’s 2017 Annual Report.

Demand for electricity continued rising in China in 2017. With the continuous optimization of energy structure, power generated by non-fossil fuels increased rapidly. China had the largest newly installed wind power capacity in the world; accounted for 37% of global newly installed capacity and remained as the world’s largest wind power market for the eight consecutive years.

After 20-year of exploration and development, Goldwind now owns three major businesses including wind turbine manufacturing, wind power service, and windfarm investment and development and other businesses such as water treatment, and has achieved sustainable development through diversified profitability channels. Although Goldwind encountered challenges brought up by declined installed wind power capacity in China and industrial competition in 2017, the Group focused on enhancing customer experience, promoting R&D, and releasing new products that were popular among clients, and thus developed stably in international business. According to Bloomberg New Energy Finance, Goldwind installed over 5.3GW newly installed wind power capacity in China in 2017 and captured 29% market share, and was ranked the first in Chinese market for seven consecutive years. Citing from the Report on Market Share of 2017 Global WTG Manufacturers published by Bloomberg New Energy Finance, Goldwind ranked the third largest global market share.

Goldwind regarded technological innovation as the key force and strived to meet diversified customer demands through innovation and upgrade of products. Being responsive to complicated and various needs of the market and to cater to the rapid expansion of low wind-speed market, Goldwind released a new generation of products based on the existing 2MW unit platform, whose representatives are 131/2S and 126/2S units; the Company also released new 130/2500 and 140/2500 low wind-speed products based on the existing 2.5MW unit platform, and expanded the coverage of 2.5MW product line in specific market segments. 3S unit platform was optimized from various aspects, such as capacity-lifting strategy, life management strategy, tower series configuration strategy, unit platform intelligence, power generation upgrade, and offshore adaptation design. According to Annual Best WTGs Evaluation conducted by Windpower Monthly, a professional magazine of global wind power industry, Goldwind’s GW 140.3MW unit won golden award of the “Best Large-Power Onshore WTG (above 3MW)”, and GW 115/2.0MW unit won bronze award of the “Best Onshore WTG (below 2.9MW)”.

The development of wind power services market has surged in recent years. With technological innovation and technical advancement, wind power services have gradually digitalized. Goldwind launched several digital service products in 2017: the mass application of POWERNEST™ helped improving annual average power generation of wind power efficiently; EFarm radar intelligent technique promoted the adaptation and stability of wind turbines; “Smart Operation O2O Model” highly integrated digital platforms and business targets; the SOAM™ (Smart Operation Administration & Maintenance) system merged comprehensive smart energy solutions of advanced application, including power projection, smart fault diagnosis, malfunction warning, and wind turbine optimal operation. Revenue from wind power service business recorded RMB 2,056.62 million in 2017, representing 65.12% increase YoY.

Wind farm investment and development business also performed distinctively in 2017 with further improvement of wind curtailment problem. Revenue of power generation from the Group’s operating wind power projects this year was RMB 3,247.36 million, with an increase of 34.51% YoY. Revenue from wind farm investment was RMB 649.60 million, represents 11.61 times more than previous year’s revenue. As at the end of the Reporting Period, the Group’s accumulated connected installed capacity of wind farms reached 4,713.50MW and accumulated attributable connected capacity was 3,868MW. Wind farm projects in construction had 1,523.15MW capacity, among which attributable capacity was 1,496.15MW; and utilization of WTG-generated power was 1,994 hours.

Goldwind actively explored offshore and overseas market through promoting “offshore and overseas” strategy. Seizing the opportunity of the surged offshore wind power market, the Group has arranged four offshore wind power bases alongside coastal areas. During the Reporting Period, Goldwind released an integrated solution targeting offshore wind power development, the “integrated solution of 6.X wind turbine + monopile foundation”. This solution, by combining large-diameter impeller and large capacity of the WTGs, which could help reducing the cost on foundation-building, installment, land requisition, submarine cable, and operation and maintenance, and thus created high profitability of regional offshore wind power. In addition, Goldwind has entered a new era in the foreign market, as it made breakthroughs in six emerging markets including Uzbekistan, Turkey, Kazakhstan, the Philippines, Argentina and Brazil. As at the end of the Reporting Period, capacity of newly developed projects and storage projects in the Group’s overseas market has strike a new record, reaching 1.2GW.

Goldwind also devoted itself in new energy arena such as water treatment business and achieved significant progress in terms of business scale and profitability capability in 2017. The Group operated 28 water treatment plants and the designed scale of water treatment business reached nearly 1.7 million tons per day. Throughout the year the Group dealt with 169.517 million tons of sanitary sewage and industrial wastewater. Revenue from water treatment business reached RMB 161.70 million, representing an increase of 70.73% YoY; net profit reached RMB 81.33 million, with 245.55% increase YoY.

Accelerating the transformation of energy structure have been agreed globally. The development of renewable energy is a necessity toward global energy revolution and green, low-carbon development. China considered developing clean energy as the main task when conducting structural reform on the supply side of energy. China also deepened energy revolution, focused on promoting the transformation of energy production and utilization mode, optimized the structure of energy supply, promoted the efficiency of energy usage, and built an energy system that is clean, low carbon, safe and highly efficient. By facing of the global energy transformation and steady development of renewable energy industry, Goldwind will continue promoting Internet+ Smart Energy practice and digital basic platform construction. While keeping steady growth in core businesses, the Group will also accelerate the diversification and scale expansion of businesses, to continue strengthening core competitiveness of international business and become an international leader that provides superior solutions for clean energy, energy-saving and environmental protection.

On behalf of the Board, I would like to express my sincere gratitude to our Shareholders and business partners for your continued support in 2017, and to each of Goldwind’s employees for your efforts.

Wu Gang

Chairman

Beijing, 23 March 2018