According to the annual report for 2011, released on 11 April, Sinovel had 2.9GW of wind turbines installed in 2011, down 32.85% on 2010. It earned CNY 776 million net profits in 2011, down 72.84%. And it won CNY 10.4 billion operating income in 2011, down 48.66% on 2010.
Sinovel blamed the poor figures on the falling demand from Chinese wind farms, a result of policy change for sustainable development.
It also attributed the fall to a slump in turbine prices, a result of over-capacity and market competition in 2011. In late 2011, the market price for 1.5MW turbines dropped by 40% from 2008's figure of CNY 6,000/kW.
In face of the inevitable downslide in net profits, Sinovel said it is actively adjusting its priority and market strategies to improve core competitiveness and profiting capacity.
Sinovel said it will develop 3MW and larger turbines in the future to maintain and expand its share in the Chinese market. It expects to raise the profit margins with more orders for 3MW and larger turbines.
The solution is to develop big-capacity wind turbines in order to achieve of higher gross profit margins.
As shown in the annual report, Sinovel had markedly raised the proportions of 3MW, 5MW and 6MW turbines in its order structure.
By the end of 2011, Sinovel had 14,348.5MW turbines signed or won. The orders included 4,466MW signed turbines, which comprised 3,582MW for 1.5MW turbines, 981MW for 3MW turbines, and 5MW for 5MW turbines.
But there was a change in unconditional orders. For the first time, 3MW turbines surpassed the proportion of 1.5MW turbines in its order structure. The 9,882.5MW orders comprised 4,698MW for 3MW turbines, 4,138.5MW for 1.5MW turbines, 905MW for 5MW turbines, and 150MW for 6MW turbines.
In contrast, other Chinese wind turbine makers remain in the trial stage with 3MW turbines. Goldwind sold only two 3MW turbines in 2011. Dongfang Electric rolled off a 3MW prototype from the production line in November 2011. Guodian United Power rolled off a 6MW prototype in 2011.
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