Goldwind USAChinese Wind in the Americas

Prepared by:

Jasjit Singh, Harmandeep Deol, Neha Randhawa

Agenda

• Background

• Industry

• Financials

• Critical Issues

• Recommendation

Cost per MW

Goldwind Development History

Wind farm in Panama 2015 | $427 Million | 86 Turbines

Ownership Structure

Leadership – Goldwind US

Tim Rosenzweig

CEO

David Halligan

CFO

Matt Olive

VP Sales

Scott Rowland

VP Engineering

Kate Dusett

VP Planning. Operations, Logistics

Nancy Cook

Head – Marketing & Strategy

David Halligan

CEO

Nurdin Bi

CFO

Matt Olive

VP Sales

Scott Rowland

VP Engineering

Kate Dusett

VP Planning. Operations, Logistics

Nancy Cook

Head – Marketing & Strategy

2012

2014

Market Share in 2013

*http://www.goldwindglobal.com/upload/files/201403/201403240919393.ppt.pdf

Industry View- Annual Installations (MW)

International Presence

Financials

Pricing Pressure in RMB/KW

Revenue Segmentation

Issues Facing Goldwind USA

• Banks and utility companies hesitant to finance new energy projects due to economic conditions… recession in 2008

• Goldwind USA leadership team lacks the credentials to be successful

• Reduced overall demand for energy led to lower prices for natural gas and other conventional power generation

• United States do not have as lucrative government incentives for the wind sector and current subsidies and tax credits might not be renewed

• Battling well-known industry players and brands in the United States

Issues Facing Goldwind USA Cont’d

• Quality concerns with Chinese developed wind turbines

• Wind industry growth declining since watermark year in 2008

• Several international entrants failed in the early 2000s which has left a bitter taste in the mouth of Americans

• From start to finish, a wind farm could take up to 5 years to become operational…. Ease depends on many factors including which state the wind farm will be setup in

• Failure to achieve wind “grid parity”… price that is on par with conventional power sources

3 Critical Issues for Goldwind USA

1. Leadership team lacks the relevant experience to be successful

2. Lacking customer pipeline of projects

3. Lack of brand awareness and respect in the United States

Addressing Leadership Team

• Lacks the relevant experience

• 113 years of experience… But all in a few small firms (start-ups)

• Need to address talent gap in leadership team

• Source talent from top American firms

– Leverage GE human capital and pipeline to develop Goldwind USA

Options for Goldwind

Sell Turbines to Developers of Wind Farms

•PROS: Simple process of earning revenue & low risk investment

•CONS: Constrained financing, reduced power demand & power of large firms

Partner with Utility Companies

•PROS: PPAs are inherent in deal & consistent revenues

•CONS: Difficult convincing Utility companies to work with Goldwind

Full Ownership of a Project prepared by a Developer

•PROS: Experienced, brand awareness & service companies can support farm

•CONS: Significant up-front investment and risk on not being able to sell

Financier of Wind Farms

•PROS: Ensure sales of turbines by providing financial instruments

•CONS: Growth tied to equity & capital versus turbine sales

Recommendation

Goldwind USA should implement a BOT Strategy… Build, Operate & Transfer

• Potential US customers skeptical of qualityand integrity of Chinese products

• Need to convince customers of Chinese capabilities, Goldwind best option vs. others (eg. GE)

• Chinese business culture - personal trust and long-term relationships are critical in business decision making

Issue of Branding

• Demonstrate successful operating record in China can transfer to US

– Strong cash position, commitment to R&D

– Thousands of MW installed in China

– Known for reliability

– 25,000 years turbine ops experience

– Terrain more harsh in China, US market should be easier

– Geography doesn’t impact performance and experience … “commercially proven”

Issue of Branding Cont’d

• Showcase technology capabilities

– German proprietary via (Vensys)

– PMDD (turbine efficiency, fewer failures)

• Source component parts in Germany, assembly in US, sell in US

• Need to forge strong supplier relationships and skilled after-sale service partners

Issue of Branding Cont’d

• Reinforce US advertising campaign:

– Brand personality

– Communicate human elements

– Quality of products

Issue of Branding Cont’d

• New supplier selection process

• Address Chinese concerns of quality, assurance and control

• Begin with selecting US suppliers with whom HQ had previous relationships

• Generate supplier network to hedge market cycles – ensured product availability and lead time flexibility

Convincing the Chinese to Source Locally

Why Source Locally?

• Reduce market skepticism around Chinese quality

• Improved logistics by reducing lead times overseas and transportation costs

• Suppliers can visit site for troubleshooting easily, local after-sales support

• Reduced rates from US suppliers due to 2008 recession

• Job creation

Thank you!

Q&A