Raise forecasts on wind capacity addition in China. We raise our overall forecasts for  onshore wind addition to 46/47/49/51 GW from 28/33/34/37 GW and forecasts for  offshore wind addition to 2.1/9/11/13 GW from 3/3.5/3.5/5 GW in 2022-25E. We  expect total wind addition to exceed 275 GW during the 14th FYP. The mega-size  renewables base would be the main force in driving onshore wind installation. For offshore  wind, we calculate capacity addition could reach 52 GW during the 14th FYP based on  installation targets set by key coastal provinces and expect the tendering volume to pick up  significantly in 2022.

Key trends in supply chain and turbines. Following the removal of the national subsidy,  the average tendering price for turbines dropped by 30-50% in 2021 while tendering volume nearly doubled. Among wind turbines we expect: (1) higher margin pressure in  2022; (2) continued market share gains from lower tier players; (3) wider application of  larger turbines with lower unit cost; and (4) increased penetration of hybrid drive. Across  the supply chain, we see: (1) acceleration in capacity expansion from top tier suppliers;  (2) tight supply of certain components for larger turbines; and (3) domestic substitution to  create opportunities for domestic suppliers.