[Click eStock] "CS Wind's Profit Growth Cycle Will Be Large and Long-Lasting"

[Asia Economy Reporter Hwang Yoon-joo] Eugene Investment & Securities maintained a 'Buy' rating and a target price of 100,000 KRW on CS Wind on the 26th, stating that its entry into the U.S. offshore wind tower market is faster than expected.

Researcher Han Byung-hwa of Eugene Investment & Securities said, "CS Wind's Portugal subsidiary will begin supplying towers within this year to large-scale offshore wind farms in the U.S. waters of Rhode Island and Virginia, which will be completed starting in 2024."

Han added, "It is understood that the current Portuguese production subsidiary acquired by CS Wind had signed contracts to supply towers before the acquisition," and explained, "There was a risk of project delays due to patent lawsuits between GE and Siemens over offshore wind turbines, but recently the court allowed deliveries for these two projects on the condition that GE pays royalties."

CS Wind has specialized in supplying offshore wind towers in Taiwan and has irregularly supplied European demand from its Vietnam factory. Offshore wind towers accounted for less than 10% of total sales.

Researcher Han recently forecasted that the offshore wind market is blooming in earnest in Europe and the U.S., and CS Wind's related sales will increase significantly. He explained that the company will greatly benefit from the Inflation Reduction Act (IRA). He particularly noted the start of supply from the Portugal factory to offshore projects in the U.S. East Coast waters.

He said, "CS Wind's U.S. offshore wind tower sales were expected to begin after 2025, when a factory on the East Coast is constructed," and analyzed, "As the market grows and suppliers are scarce, CS Wind's Portugal factory has become a production base for offshore wind targeting the U.S. East Coast."

He also evaluated, "Going forward, global policies will focus support on local companies like the IRA, so CS Wind, which has local factories in most major global markets, will inevitably have overwhelming competitiveness."

He is also paying attention to the expansion of offshore wind in EU countries. The annual offshore wind installation capacity in the EU is expected to surge from the current 1-2 GW level to about 20 GW by 2030.

Researcher Han added, "Portugal currently has no offshore wind, but will hold a bidding for 10 GW of offshore wind installations next year," and "The Netherlands has raised its installation target to 70 GW, and France, which completed its first offshore wind farm, plans to build 50 farms."