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Chinese turbine manufacturer Xinjiang Goldwind Science & Technology Co. posted strong first-half earnings in its latest financial report.

Net income increased 29% to 92.7 million yuan ($15.1 million) for the first half ended June 30, compared with 72.1 million yuan for the same period last year. Sales fell 7% to 3.23 billion yuan. At the end of the first half, Goldwind had 4.55 GW in signed contracts for orders.

Additionally, the company sold a higher percentage of 2.5 MW wind turbines this year, which generally carry higher margins than the 1.5 MW turbines. Further, revenue from Goldwind's service unit grew 27% in the first half, compared with the first half of 2012.

However, the company's decision made less than five years ago  to become active outside its home market appears to be paying off. In January, the company sold the 109.5 MW Shady Oaks wind farm, located in Illinois, to Algonquin Power Co.

Clearly, Goldwind has big plans for its international segment and intends to continue penetrating markets outside of China, such as Latin America and the U.S., the home of subsidiary Goldwind USA.

"We were a new market entrant at a tough time," Tim Rosenzweig, CEO at Goldwind USA, recently told NAW. "It was summer 2010, and we needed to demonstrate that we were going to be players in this market. I'm really proud of the way our team executed on the market strategy."

Such a market strategy includes proving that its permanent-magnet direct-drive technology is viable. In fact, Goldwind says DNV KEMA Energy & Sustainability is in the process of validating the company's fleet performance and expects to have 100 equivalent wind turbine years of operational experience well above 95% later this quarter.

According to Rosenzweig, the certification is widely regarded among industry participants as the final threshold in being considered financeable in North America.

"Having recently sold our 109.5 MW Shady Oaks wind farm to a Western buyer (Algonquin Power Co.) and closed a $71 million project financing with Western lenders in Panama, we are excited that this performance milestone further advances our calculated and measured market entry plan and unlocks vast new pools of capital for our customers," he says.

Having secured financing from both Eastern and Western financial lenders gives further credibility to the company's so-called Chinese technology - although Goldwind's generators and nacelles are licensed from German provider Vensys.

"That's a pretty high bar to clear in three-and-a-half years," Rosenzweig notes.

The company's international progress comes at a time of great challenges in its home market of China, where new turbine installations decreased by 26%, compared with 2011. (Even Goldwind's first-half revenue was 6.8% lower than in the same period last year.)

Despite Goldwind's strongest performance among Chinese turbine manufacturers internationally, some say success may be too early to call.

Feng Zhao, an analyst at Navigant Consulting, notes that Goldwind has exported only 77 units to five markets in 2013.

"The exports alone are not big enough to help Goldwind maintain its leadership," Zhao explains. "It has to rely on its home market to maintain its position among global top ten turbine original equipment manufacturers."

However, he says as soon as China addresses its challenges, such as transmission constraints, "Goldwind will take off immediately and find its position back among the global top five."


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