China Ming Yang Wind Power Group's CEO Discusses Q4 2010 Results - Earnings Call Transcript

China Ming Yang Wind Power Group Limited (MY)

Q4 2010 Earnings Conference Call

9 March 2011, 8:00 AM ET


Calvin Lau - Director - IR

Chuanwei Zhang - Chairman, CEO

Manfred Loong - CFO


Paul Clegg - Mizuho Securities

Boris Kan – JPMorgan

Edward Chun - Clairvoyance Capital

Pey Yap - Morgan Stanley

Edwin Pang - Credit Suisse

Laurent Wong - Merrill Lynch



Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2010 China Ming Yang Wind Power Group Limited Earnings Conference Call. Your two -- three hosts for today is your Chairman and CEO, Chuanwei Zhang; your CFO, Manfred Loong; and Calvin Lau, Head of Investor Relations. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session.

(Operator Instructions)

This press release contains forward-looking statements. These statements constitute forward-looking statements within the meaning of Section 21e of the Securities Exchange Act of 1934 as amended and as defined in the US Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as will, expects, anticipates, future, intends, plans, believes, estimates, target, goals, strategy and similar statements.

Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risk, uncertainties or other factors, all of which are difficult to predict and many of which are beyond Ming Yang's control, which may cause Ming Yang's actual results, performance or achievements to differ materially from those in the forward-looking statements.

Further information regarding these risks and other risks, uncertainties or factors is included in Ming Yang's filings with the US Securities and Exchange Commission. Ming Yang does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise except as required under applicable law. I would now like to turn the call over to your Director of Investor Relations, Calvin Lau. Please proceed.

Calvin Lau

Thank you, Chanelle, and thank you, everybody, for joining us today for China Ming Yang Wind Power's Fourth Quarter and Full Year 2010 Financial Results Conference Call. The fourth quarter and full year 2010 earnings release was issued earlier today and is available on the Company's website at We have already provided supplemental presentations -- presentation material for today's earnings call, which can also be found on our IR section of the website. I hope you've all had the chance to review by now.

On the call today from China Ming Yang Wind Power are Mr. Zhang Chuanwei, Chairman and Chief Executive Officer; and also Chief Financial Officer, Mr. Manfred Loong. And in the call today, we'll have Mr. Zhang discussing business and operational developments. Then, Mr. Loong will take you through a discussion of the Company's financial performance. After that, we'll open up the floor to questions from the audience. And with -- I would like now to -- like to turn the call over to Mr. Zhang. Please proceed.

Chuanwei Zhang

(interpreted) Ladies and gentlemen, I'm Zhang Chuanwei, Chairman and CEO of China Ming Yang Wind Power Group Limited. Today, we are pleased to announced Ming Yang's fourth-quarter and full-year earnings for 2010.

We have achieved and exceeded our operational targets this quarter, but before I provide a detailed update of our results, I would like to take this opportunity to share with you some of the latest developments in China's wind power industry.

China has become a world leader in the wind power industry. Industry analysts from Global Wind Energy Council shows that China has increased their installation capacity, and accumulative installation capacity in 2010 reached 16.5 gigawatts and 40 gigawatts respectively, making China the world's number one in terms of wind power installation capacity.

In China’s twelfth five year plan, wind power is included as China's strategic, emergent energy industry, and we are likely to see continued, fast and steady growth in this industry. China has been promoting the development of wind power as a state policy, and the construction of the national grid, and the issues associated with the grid are gradually being resolved.

In Inner Mongolia and Jillin, where grid networks have been established, construction of large-scale grids have now been completed and opened. Large-scale wind power developments have also been launched in central, eastern and southern China where no grid systems were previously established.

Manufacturing in China's wind power industry has become more and more concentrated. The top five wind turbine manufacturers in China, including Ming Yang, currently account for over 60% of the domestic market. Competition among the top five wind turbine manufacturers have gradually switched from just the competition on pricing to a comprehensive competition in generating the latest wind turbine technology and focusing on product quality, electricity power quality, electricity generation capacity and the cost per kilowatt.

We have seen the price of wind turbine units decrease steadily and the profitability of a business relies on a manufacture's ability to handle large-scale operations and integrate upstream capabilities to reduce supply chain costs.

These are the strengths and the competitive advantages of Ming Yang. And because of this, we are confident that we will achieve a stable and high-growth profit margin for the year ahead. I will now go through the operating performance of Ming Yang in the fourth quarter of 2010.

Ming Yang performed very well this quarter. We successfully recognized the revenues of 802 units, which exceeded our internal target. While we continue to experience price decreases per unit, we achieved a gross profit margin of 22.3% in the fourth quarter.

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