cleantech & industrial growth: windtpi composites, inc ... · business in turkey/china with...

Philip Shen, (949) [email protected]

Justin Clare, CFA, (949) [email protected]

Sales (800) 933-6830, Trading (800) 933-6820

COMPANY NOTE | EQUITY RESEARCH | January 17, 2017

Cleantech & Industrial Growth: Wind

TPI Composites, Inc. | TPIC - $17.48 - NASDAQ | Buy

Initiation of Coverage

Stock Data

52-Week Low - High $11.31 - $23.30Shares Out. (mil) 33.74Mkt. Cap.(mil) $589.73-Mo. Avg. Vol. 158,47212-Mo.Price Target $23.00Cash (mil) $106.8Tot. Debt (mil) $110.9

EPS $

Yr Dec —2016E— —2017E— —2018E—Curr Curr

1Q 0.07A 0.06E 0.26E2Q 0.44A 0.17E 0.32E3Q 0.08A 0.21E 0.34E4Q (0.06)E 0.24E 0.38E

YEAR 0.52E 0.68E 1.29EP/E 33.6x 25.7x 13.6x

EPS is "Core EPS," see model for GAAP EPS

Revenue ($ millions)

Yr Dec —2016E— —2017E— —2018E—Curr Curr

1Q 176.1A 209.5E 245.7E2Q 194.3A 215.9E 271.2E3Q 198.9A 222.4E 283.9E4Q 187.1E 233.0E 303.0E

YEAR 756.4E 880.7E 1,103.9E

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TPIC One-Year Price and Volume History

TPIC: LT Visibility into Earnings Power &Attractive ROIC; Initiating at BuyTPI Composites, Inc. (NASDAQ: TPIC) is a leading global manufacturer ofblades for wind turbine OEMs. The company has secured long-term contractswith four of the largest turbine OEMs with contracted revenue potential of upto $4.2bn through 2023. A growing wind market and the company's dedicatedsupplier model could enable annual facility ROIC of up to 30%. The upcominglock-up expiration (1/18) could present an opportunity to add/establish aposition in the stock. Initiating at Buy, $23PT.

■ We are initiating coverage on TPIC with a Buy and $23PT. Approximately15 years ago Steve Lockard, the current CEO, refocused TPIC away fromshipbuilding and on the wind industry to best utilize the company's expertisein advanced composite technology. This expertise and the company'scollaborative customer model, in our view, has allowed it to secure long-termsupply agreements with top wind turbine OEMs, and we see potential foradditional customer wins ahead.

■ TPIC has established a global manufacturing footprint with facilitiesstrategically located in key markets. We forecast global wind demand (ex-China) to grow at an 8% CAGR through 2020 and believe TPIC’s globalmanufacturing footprint is well-positioned to take advantage of continuedstrength in the European and North American markets, where we forecastdemand of 14GW and 11GW, respectively in 2017.

■ OEMs are expected to increase the share of blades that are outsourcedto 59% in 2017 from 52% in 2013, according to data from MAKEConsulting. We believe TPIC is well-positioned to benefit from increasedoutsourcing as OEMs work to share risk and capex/WC requirements.

■ We believe TPIC has the potential to deliver an annual facility ROIC of>30%. TPIC’s long-term agreements require minimum purchases of $2.7bnthrough 2023 with the potential for $4.2bn. We estimate TPIC’s annual ROICcould be ~10% under a scenario of minimum purchases and as high as~30% if customers acquire the maximum volumes.

■ GE's acquisition of LM Wind has puts and takes. While GE extended itsIowa/Mexico contracts with TPIC through 2020, other regions could be atrisk. We believe management has the ability to backfill potential loss of GEbusiness in Turkey/China with other customers. We would expect TPIC towin some of LM Wind's business as customers are likely not keen on sharingtheir latest turbine designs with GE.

■ We establish a $23PT by applying an 8.8x multiple to our discounted2018E EBITDA. Turbine OEMs with in-house blade capacity trade in a rangeof 6-9x. We believe our multiple reflects TPIC’s differentiated business modeland position in the value chain.

Important Disclosures & Regulation AC Certification(s) are located on page 43 to 44 of this report.Roth Capital Partners, LLC | 888 San Clemente Drive | Newport Beach CA 92660 | 949 720 5700 | Member FINRA/SIPC

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TPI COMPOSITES, INC. Company Note - January 17, 2017

Key Questions We address what we believe are the key questions for investors regarding TPIC including:

(A) What is the growth outlook for the global wind industry? (B) How is TPIC positioned, and what are the potential impacts of GE’s acquisition of LM

Wind? (C) What are the key drivers of TPIC’s potential growth ahead? (D) How attractive is TPIC’s collaborative manufacturing model? (E) What kind of earnings power does TPIC have? (F) What is TPIC worth?

(A) What is the growth outlook for the global wind industry?

TPIC is positioned to benefit from growth in global annual wind installations, which we expect to increase at a ~8% CAGR (ex-China) to reach a cumulative ~480GW in 2020. We expect the EU to reach ~219GW of wind capacity by 2020 with both Germany and the UK having posted strong installations in 2016. We expect the U.S. wind market to remain robust given the support of the PTC extension. While China represents the largest global wind market, TPIC exports the majority of its wind blades manufactured in China to other markets and has limited exposure to China demand directly.

Exhibit 1: We expect global annual wind installations to grow at a CAGR of ~4% from 2016 through 2020.

Source: GWEC; ROTH Capital Partners estimates.

Exhibit 2: Ex-China, we expect global annual wind installations to grow at a CAGR of ~8% from 2016 through 2020.

Source: GWEC; ROTH Capital Partners estimates.

While we expect government policies to continue to support wind demand growth, we expect that attractive LCOEs for onshore wind power to support non-policy driven demand ahead. France, Germany, and the UK each maintain feed-in tariffs. In North America, Canada’s wind energy market has stalled, though Prime Minister Justin Trudeau could implement a regulation requiring Canada’s 13 provinces to agree on carbon taxation. In the United States, the Production Tax Credit (PTC) was recently extended through 2019 as it steps down 20% each year. China’s utilities are state-owned and guarantee the procurement of wind energy. Additionally, China supports wind development with an FIT subsidy and an immediate Value Added Tax (VAT) refund for wind power. In India, the government is promoting wind power through renewable purchase obligations for utilities as well as incentives to wind developers in the form of accelerated depreciation and “special additional duties,” a subsidy to manufacturers of turbine components. Ex-China, we forecast steady and healthy growth in nearly all regions globally. China only met 10-12GW of the 31GW government mandated installation quota in 2016, suggesting the difference could roll into 2017 and 2018. Developers must complete

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construction by YE’17 or YE’18 to get 2015 or 2016 FITs, respectively. In order to reach its goal of 60GW of wind power by 2022, India’s central government is pushing for 5GW of additions in both 2017 and 2018, though we are more conservative in our forecast. We forecast 3.1GW, 3.2GW, and 1.5GW installs in Germany, France, and the UK, respectively, in 2017. In the EU overall, MAKE Consulting expects 8GW of old projects could be repowered through 2025. GWEC expects North America to demand 60GW of capacity through 2020, representing 67% growth. We forecast demand in the United States to be 8.0GW in 2017 and 9.2GW in 2018 and could see an attractive repower trend in the U.S. as well. We see Canada as an emerging player with potential demand of 1.9GW and 2.5GW in 2017 and 2018, respectively. Although South America is anticipated to have a high annual demand growth rate, absolute additions are likely to be modest in part due to political instability in the region. The largest player in South America, Brazil, recently cancelled its second renewable auction of the year. Exhibit 3: Ex-China, we forecast steady and healthy growth in nearly all regions globally.

Source: GWEC; BNEF; EWEA; PWA; CWEA; EIA; IEA; IRENA; NEB; ROTH Capital Partners estimates.

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(B) How is TPIC positioned, and what are the potential impacts of GE’s acquisition of LM Wind?

We believe the competitive landscape currently consists of only two pure global wind blade manufacturers—TPIC and LM Wind—and regional players clustered in China and India. LM Wind and TPIC each have facilities in the U.S., China, and Europe, but LM Wind also has facilities in India and Brazil. Other players, such as LianZhong (China), Sinoma (China), Tecsis (Brazil), appear to be regionally focused. (See details of some of these players in our Appendix.) We believe a global manufacturing presence is key to winning and sustaining outsourcing relationships with the top tier turbine OEMs that must be able to meet demand in markets across the world. By working with the same outsourcing client, such as TPIC, across multiple markets, we believe turbine OEMs can enable greater efficiencies, synergies, and cost savings. All in, TPIC, in our view, is well positioned to deliver one of the industry’s best total delivered cost in the regions it operates in given its experience, technology, scale, among other factors. On the same day it announced the LM Wind acquisition, GE also extended long-term supply agreements with TPIC. GE renewed its commitment to procure blades from TPIC’s Iowa facility and two of its Juarez facilities through 2020. GE indicated it intends to operate LM Wind as a “standalone unit” and expand relationships with LM Wind’s customers, while also sourcing blades from other suppliers. Despite this view, GE may choose to source a larger percentage of blades from LM Wind as opposed to TPIC. We believe GE’s acquisition of LM Wind poses a moderate threat to TPIC’s ability to renew its China and Turkey GE contracts, which are set to expire in 2017. We estimate GE accounted for 51% of TPIC’s Q1-Q3’16 revenue and any step down of sales to GE could have an adverse effect on TPIC’s future revenue. GE has stated that the strategy behind the LM Wind acquisition is similar to previous acquisitions such as that of Avio (part of GE’s aviation business), which was completed to “de-risk the supply chain.” Jeff Immelt and Jérôme Pécresse of GE have stated that these acquisitions allow GE to accelerate technological innovation in order to match the pace of changing market demands, such as the trend of lengthening wind blades. Notably, GE was the only major turbine OEM without in-house blade manufacturing capacity, which we believe was a key driver to backward-integrate. After GE closes its acquisition of LM Wind, we would expect TPIC to win customers away from LM Wind. TPIC appears to be the only remaining independent wind blade manufacturer with global manufacturing capability. Although it appears GE intends to continue serving external wind blade customers with LM Wind, we believe wind turbine OEMs will not want to share their proprietary blade designs with GE, thereby shifting business to TPIC and others.

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Exhibit 4: In the exhibit below, we provide a rough, global sketch of the number and type of manufacturing operations in each region by company to provide a perspective of the wind industry’s competitive landscape. For detailed facility maps by company, please see our Appendix.

Source: Company filings, websites, and reports; ROTH Capital Partners.

TPIC generally produces 50-60 meter wind blades, but has the ability to produce >60 meter blades at all of its facilities. Demand for wind blades continues to shift toward longer blades that enable greater efficiency and energy production. Over time, we expect revenue per blade set to increase as blade lengths increase. With TPIC’s ability to produce 60 meter blades today at all its facilities, we believe the company is well prepared relative to competitors to manufacture longer blades ahead.

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Exhibit 5: TPIC has made >30 meter blades and generally produces 50-60 meter blades currently. TPIC is also required to be able to manufacture >60 meter blades at all of its facilities.

Source: MAKE Consulting; SEC filings; ROTH Capital Partners.

(C) What are the key drivers of TPIC’s potential growth ahead? Beyond an attractive market growth outlook for the global wind industry, we see three growth drivers for TPIC: (1) Increased outsourcing; (2) TPIC customers increasing share; and (3) Winning new customers. (1) Despite GE’s pending acquisition of LM Wind, we continue to believe the trend

toward outsourcing of wind blade manufacturing could drive growth for TPIC. From 2013 to 2017, turbine OEMs are expected to outsource a greater share of wind blade manufacturing as outsourced blades are expected to account for 59% of the total market in 2017 vs. 52% in 2013 according to MAKE Consulting. The trend toward greater outsourcing, in our view, is being driven by turbine OEMs seeking lower cost production, greater capital efficiency, and greater flexibility in meeting global growth demands. With its global manufacturing footprint near key wind markets and record of reliability, we believe TPIC could continue to benefit from increased outsourcing and increase business with both current customers and new potential customers.

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Exhibit 6: TPIC has benefitted from OEMs outsourcing blade production to achieve greater capital efficiency and flexibility in meeting expanding global demand.

Source: MAKE Consulting; TPIC investor presentation (12/1/16); ROTH Capital Partners. (2) We expect TPIC’s top customers to increase global market share and support

growth in TPIC’s business. TPIC’s top four customers—GE Wind, Vestas, Gamesa, and Nordex—are expected to increase global onshore market share from 32% in the three years ending December 2015 to 40% in 2020 according to MAKE Consulting. Given TPIC’s unique dedicated manufacturing model and the strength of its customer relationships, we see the potential for TPIC to grow with its top customers and outpace overall wind market growth through 2020.

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Exhibit 7: TPIC’s four largest customers comprised 32% of the onshore turbine market during the three years ending 12/31/15…


Exhibit 8: …and are forecasted to comprise 40% of the market in 2020.


Exhibit 9: Excluding China, TPIC’s four largest customers comprised 57% of the onshore turbine market during the three years ended 12/31/15…


Exhibit 10: …and are forecasted to comprise 62% of the market in 2020.

Source: MAKE Consulting; SEC filings; ROTH Capital Partners. (3) TPIC has successfully diversified its customer base since 2013 and could drive

future growth with additional customer wins. TPIC has won long-term contracts with four of the top 10 wind blade manufacturers globally and has earned a reputation for reliable production. Additionally, TPIC has established a global manufacturing presence with successful new facilities installed across multiple markets. As a result, we believe TPIC is well-positioned to win new business in current and new markets and add new customers.

Vestas, 13%

Goldwind, 11%

GE Renewable Energy, 10%

Enercon, 8%

Siemens, 6%Gamesa, 5%

United Power, 5%

Nordex, 4%

Nmingyang, 4%

Envision, 4%

Others, 31%

TPIC -- 2013-2015 Onshore OEM Market ShareTotal = 142GW

Vestas, 17%

Goldwind, 11%


Enercon, 5%

Siemens, 6%Gamesa, 7%

United Power, 5%

Nordex, 5%

Nmingyang, 4%

Envision, 4%

Others, 27%

TPIC -- 2020E Onshore OEM Market Share

Vestas22%

GE Renewable Energy18%

Enercon14%

Siemens11%

Gamesa9%

Nordex8%

Senvion7%

Suzlon2%

Goldwind1%

Sinovel0%

Others8%

TPIC -- 2013-2015 Onshore OEM Ex-China Market ShareTotal = 76GW

Vestas, 27%


Enercon, 8%Siemens, 11%

Gamesa, 11%

Nordex, 8%

Senvion, 6%

Suzlon, 2%

Goldwind, 2%

Sinovel, 0%Others, 10%

TPIC -- 2020E Onshore OEM Ex-China Market Share

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Exhibit 11: We expect TPIC to continue to diversify its customer base ahead. In the exhibit below, Q2 and Q3 customer assignments are our guesses. We believe GE likely remains the company’s largest customer, accounting for 55% of Q1’16 sales and likely 49% in Q3.

Source: SEC filings; ROTH Capital Partners estimates.

(D) How attractive is TPIC’s collaborative manufacturing model? TPIC typically works in close collaboration with its customers in a “factory focus model,” enabling the company to maintain long-term relationships. In contrast to other contract manufacturing sectors, customers do not issue requests for proposal (RFPs) to blade manufacturers. Instead, TPIC maintains long-term collaborative relationships with customers to design and build highly customized blades. Contracts are generally five years in duration and are renegotiated one year before completion. This structure adds visibility to revenue and capital requirements. The investments required for mid-contract model updates are typically funded largely by the customers. TPIC’s long-term supply agreements provide clear revenue visibility with incentives for customers to maximize purchases of wind blades. Customers have committed to purchase a minimum volume of $2.7bn and are incentivized to purchase up to $4.2bn through 2023. Contracts generally stipulate that customers must purchase 100% of TPIC’s dedicated capacity for the first several years of a contract. This provision is subsequently relaxed, but typically remains above 50% for the remaining life of the contract. Customers are typically incentivized to exceed the minimum volume requirements through two mechanisms: (1) Price reductions for higher volumes and (2) Shared investment costs for new models. Consequently, customers usually order volumes that significantly exceed the minimum requirements. While some of TPIC’s supply agreements contain provisions that allow customers to terminate their contracts on short or immediate notice, we believe, over 15 years, not a single contract has ever been cancelled.

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TPIC -- Customer Revenue Concentration (1)

GE Wind Vestas Nordex Gamesa Other(1) Q2 and Q3 customer assignments are our estimates.

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Exhibit 12: We summarized a variety of press releases and filings to build the table below. We see that TPIC’s long-term supply agreements provide the company clear visibility into future revenues with 44 contracted lines expected to be in operation by YE’17.

Source: SEC filings and press releases; ROTH Capital Partners. Our analysis suggests TPIC’s collaborative business model can drive annual ROIC ranging from 32% for our 100% utilization scenario to 10% for our minimum purchase scenario. In our illustrative examples below, we evaluated TPIC’s potential return on capital for a wind blade manufacturing facility under two scenarios. In the first, we assume 100% utilization of the facility and maximum potential revenue. Under this scenario, production ramps up over a two-year period reaching maximum production in year three. ROIC increases during the ramp up phase reaching the max potential return of 32% in years three to five. Beyond start-up costs and as operational efficiency improves, we would expect TPIC’s company ROIC to converge with our illustrative facility ROIC analysis. Exhibit 13: Under our 100% utilization scenario, we believe a six line facility could generate an annual return on capital as high as 32% once the facility has reached full production in year three.

Source: SEC filings and press releases; ROTH Capital Partners estimates. Under our minimum purchase scenario, we believe TPIC could still deliver attractive annual returns of ~10% due to proportionally high variable costs and price adjustments for lower volumes. TPIC has indicated that variable costs account for ~85% of

Contracts & line expiration GE Gamesa Vestas Nordex/Acciona Lines (1)

USA 6

Newton, Iowa 2020

Mexico 14

Juarez 1 2020 ✓

Juarez 2 ✓

Juarez 3 2020

Turkey 10

Izmir 1 2017 2020

Izmir 2 ✓ 2023

China 14

Dafeng ✓ ✓

Taicang Port 2017

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(1) Dedicated lines

Scenario 1 -- 100% Utilization Units Year 1 Year 2 Year 3 Year 4 Year 5

Lines # 6 6 6 6 6

Sets produced per line Sets 24 54 68 68 68

Set ASP $mn 0.39 0.39 0.39 0.39 0.39

Revenue/Line $ 9.3 21.3 26.7 26.7 26.7

Revenue $ 56.0 128.0 160.0 160.0 160.0

EBITDA $ 3.4 14.1 24.8 24.8 24.8

EBITDA Margin % 6.0% 11.0% 15.5% 15.5% 15.5%

D&A $ 5 5 5 5 5

Annual depreciation % 20% 20% 20% 20% 20%

EBIT $ -1.6 9.1 19.8 19.8 19.8

Tax Rate % 20% 20% 20% 20% 20%

NOPAT $ -1.3 7.3 15.8 15.8 15.8

Invested Capital

Capex $ 25 25 25 25 25

Working Capital $ 25 25 25 25 25

Total -- Invested Capital $ 50 50 50 50 50

ROIC -- 100% utilization $ -3% 15% 32% 32% 32%

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the total wind blade manufacturing cost and the company’s long-term supply agreements typically include a provision requiring that customers pay more per set if lower volumes are purchased. We believe revenue per set could increase by ~5-10% if the minimum volume is acquired by a customer in a long-term contract. In our minimum purchase scenario below, we assume that the customer acquires 50% of the maximum production potential for years three through five. Under this scenario, we would expect TPIC’s EBITDA margin to fall to 12-14% despite the higher ASPs. We believe the 67% reduction in NOPAT in this scenario illustrates the robustness of TPIC’s model as many manufacturing businesses would likely struggle to maintain profitability in a 50% utilization scenario, in our view. Exhibit 14: Even under our minimum purchase scenario, we believe TPIC could maintain profitability and generate reasonable returns due to high variable costs and higher prices on the lower volumes.

Source: SEC filings and press releases; ROTH Capital Partners estimates.

(E) What kind of earnings power does TPIC have? With the completion of manufacturing facilities in Juarez and Izmir planned by YE’17, we believe TPIC could generate 2018 EBITDA of ~$95mn growing at a 37% CAGR from $51mn in 2016. TPIC ended Q3’16 with 32 installed manufacturing lines and plans to reach 44 installed lines by YE’17. We conservatively model the completion of the 44 lines in Q1’18 and forecast 45 effective lines for the full year. With all lines up and running, we see startup costs declining and believe the company could improve opex efficiency. We forecast revenue growth at a CAGR 21% from 2016-2018 and EPS growth at a CAGR of 57% over the same period to reach $1.29 from $0.52 in 2016. Given the growth potential for the wind market, the quality of TPIC’s customers, and the potential for TPIC to win new customers, we believe TPIC’s earnings power could continue to grow beyond 2018.

Scenario 2 -- Minimum Purchase Units Year 1 Year 2 Year 3 Year 4 Year 5

Lines # 6 6 6 6 6

Sets produced per line Sets 24 54 34 34 34

Set ASP $mn 0.39 0.39 0.43 0.43 0.43

Revenue/Line $ 9.4 21.3 14.7 14.7 14.7

Revenue $ 56.5 128.0 88.0 88.0 88.0

EBITDA $ 3.4 14.1 11.4 11.4 11.4

EBITDA Margin % 6.0% 11.0% 13.0% 13.0% 13.0%

D&A $ 5 5 5 5 5

Annual depreciation % 20% 20% 20% 20% 20%

EBIT $ -1.6 9.1 6.4 6.4 6.4

Tax Rate % 20% 20% 20% 20% 20%

NOPAT $ -1.3 7.3 5.2 5.2 5.2

Invested Capital

Capex $ 25 25 25 25 25

Working Capital $ 25 25 25 25 25

Total -- Invested Capital $ 50 50 50 50 50

ROIC -- Minimum Purchase $ -3% 15% 10% 10% 10%

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Exhibit 15: TPIC ended Q3’16 with 32 installed manufacturing lines and plans to reach 44 installed lines by YE’17.


Exhibit 16: We forecast revenue growth at a CAGR 21% from 2016-2018.


Exhibit 17: We believe TPIC could generate 2018 EBITDA of ~$95mn growing at a 37% CAGR from $51mn in 2016


Exhibit 18: We forecast EPS growth at a CAGR of 57% from 2016-2018 to reach $1.29 from $0.52 in 2016.


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Exhibit 19: By YE’16 we expect TPIC to have 45 dedicated manufacturing lines and we expect 44 of these lines to be in operation by early 2018.


Exhibit 20: TPIC has expanded its MW capacity per line by approximately 76% since 2013 as the industry has moved towards larger blades.

Source: SEC filings; ROTH Capital Partners.

(F) What is TPIC worth?

Applying an 8.8x multiple to our discounted 2018E EBITDA of $88mn, we establish a $23PT for TPIC. Our multiple is modestly above the peer average as we believe it reflects TPIC’s ability to outperform relative to other industry players. In our view, a higher multiple is justified as TPIC’s business of collaborative blade manufacturing represents a unique position in the value chain. Furthermore, TPIC’s supply agreement volumes offer visibility for our model through 2023. Following GE’s acquisition of LM Wind, Sinoma remains the only other public pure-play blade manufacturer, trading at 15.5x 2017E EBITDA. Other comparable firms are largely OEMs with in-house blade capacity, trading between 6-9x. The usefulness of public comparable companies is limited, in our view, as Sinoma is concentrated in China and OEMs represent TPIC’s customers, not competitors. We see ~33% upside to the stock with our $23PT.

TPIC’s largest client, GE, recently announced the acquisition of TPIC’s largest competitor, LM Wind, at an 8.3x multiple on 2016E EBITDA. We believe LM Wind is the most closely comparable company to TPIC. Both are pure-play blade manufacturers with facilities serving the U.S., EMEA, and China markets, although LM Wind also serves Brazil and India. LM Wind is larger than TPIC, with more than double the assets and about 20% higher revenue in 2015. That said, we believe the multiple GE paid to acquire LM Wind represents a discount to TPIC’s fair value. The discount, in our view, is likely driven by (1) private equity firm Doughty Hanson’s desire to sell and realize a gain and (2) GE’s

2016 Guidance Units From Q2'16 From Q3'16 ROTHe Prior ROTHe

Total billings (1) $mn 750-760 Reiterated NA NA

Sets # 2,147-2,162 Reiterated 2,155 NA

Estimated MW MW 4,915-4,955 Reiterated 4,921 NA

Dedicated manufacturing lines at YE'16 # 38-46 44-46 45 NA

Total lines installed # 33-36 Reiterated 34 NA

Lines in transition # 0 Reiterated 0 NA

Lines in start-up # 3-6 Reiterated 4 NA

Capital expenditures $mn 52-57 50-55 55 NA

Effective tax rate % 25-30% Reiterated 30% NA

Depreciation and amortization $mn 12.7-13.2 14-15 14.4 NA

Interest expense $mn 14.5-15.5 15-16 16.0 NA

Income tax expense $mn 6.5-7.0 5.5-6.5 6.0 NA

Share-based compensation $mn 9.5-10.5 Reiterated 9.9 NA

(1) Reconcilation of billing to GAAP net sales has not yet been f inalized by TPIC.

Capacity 2013 2014 2015 Q1'16 Q2'16 Q3'16

Sets 648 966 1,609 486 551 581

MW 1,173 2,029 3,595 1,113 1,252 1,321

Lines total 16 30 32 32 32 NA

Lines dedicated 16 29 34 38 38 38

Lines installed 32 NA 30 32

Lines in start up 2 9 10 2

Lines in transition 2 8 11 3 3

MW/Set 2 2 2 2 2 2

MW/Dedicated line, annualized 73 70 106 117 132 139

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acknowledgement that LM Wind’s post-acquisition revenue would likely be substantially lower than 2016 levels as it will likely lose customers under GE’s ownership. TPIC was trading at 14.1x 2016 EBITDA estimates at the time of the announcement. TPIC’s stock reacted negatively to the news, falling 18% on the day and is now trading at 8.4x consensus 2017 EBITDA.

Exhibit 21: Wind companies trade in a range of 3.6x to 15.5x 2017E EBITDA. Turbine OEMs with blade manufacturing capacity trade in a range of 6x to 9x.

Source: Bloomberg; ROTH Capital Partners estimates.

Wind (1) Ticker Price Mkt Cap EV Calendar EPS Calendar Revs Revenue Growth Calendar EBITDA EBITDA Growth P/E EV/S EV/EBITDA P/B ROE

Run on 01/13/2017 17:31 1/13/17 $mn $mn 2017E 2018E 2017E 2018E 2017E 2018E 2017E 2018E 2017E 2018E 2017E 2018E 2017E 2018E 2017E 2018E (2)

Component manufacturers

Broadwind Energy Inc BWEN US Equity $4.12 63 41 $0.12 $0.23 194 206 10% 6% 11 14 20% 19% 34.3x 17.9x 0.2x 0.2x 3.6x 3.0x 0.9x 3%

Sinoma Science & Technology Co Ltd 002080 CH Equity $2.62 2,114 2,994 $0.13 $0.16 1,371 1,526 13% 11% 187 215 27% 15% 20.2x 16.4x 2.2x 2.0x 16.0x 13.9x 1.7x 5%

Mean 27.2x 17.1x 1.2x 1.1x 9.8x 8.5x 1.3x 0.0x

Turbine OEMs

Gamesa Corp Tecnologica SA GAM SM Equity $21.00 5,864 5,685 $1.21 $1.34 6,608 6,918 37% 5% 859 834 16% -3% 17.3x 15.7x 0.9x 0.8x 6.6x 6.8x 3.1x 21%

Xinjiang Goldwind Science & Technology Co Ltd2208 HK Equity $1.65 6,148 7,867 $0.18 $0.20 4,690 4,800 9% 2% 793 886 18% 12% 9.0x 8.4x 1.7x 1.6x 9.9x 8.9x 1.6x 18%

Inox Wind Ltd INXW IN Equity $2.69 597 731 $0.31 $0.34 735 812 1% 11% 112 124 -2% 11% 8.6x 7.8x 1.0x 0.9x 6.6x 5.9x NA NA

PNE Wind AG PNE3 XG Equity NA NA 440 $0.19 $0.28 235 254 -8% 8% 37 43 -67% 17% NA NA 1.9x 1.7x 11.8x 10.1x NA NA

Suzlon Energy Ltd SUEL IN Equity $0.22 1,109 2,649 $0.01 $0.02 1,826 2,038 24% 12% 279 311 21% 11% 17.0x 11.0x 1.5x 1.3x 9.5x 8.5x NA NA

Sinoma Science & Technology Co Ltd 002080 CH Equity $2.62 2,114 2,994 $0.13 $0.16 1,371 1,526 13% 11% 187 215 27% 15% 20.2x 16.4x 2.2x 2.0x 16.0x 13.9x 1.7x 5%

Nordex SE NDX1 GY Equity $21.49 2,084 2,356 $1.55 $1.81 3,942 4,145 10% 5% 373 409 25% 9% 13.9x 11.9x 0.6x 0.6x 6.3x 5.8x 1.9x 16%

Vestas Wind Systems A/S VWS DC Equity $68.03 15,071 12,817 $4.50 $4.94 10,315 10,784 -4% 5% 1,701 1,807 -9% 6% 15.1x 13.8x 1.2x 1.2x 7.5x 7.1x 4.4x 30%

Senvion SA SEN GY Equity $12.29 799 1,220 $1.28 $1.57 2,357 2,489 -1% 6% 224 239 1% 7% 9.6x 7.8x 0.5x 0.5x 5.4x 5.1x NA NA

Mean 13.8x 11.6x 1.3x 1.2x 8.9x 8.0x 2.6x 0.2x

Median 14.5x 11.5x 1.2x 1.2x 7.5x 7.1x 1.9x 0.2x

High 20.2x 16.4x 2.2x 2.0x 16.0x 13.9x 4.4x 0.3x

Low 8.6x 7.8x 0.5x 0.5x 5.4x 5.1x 1.6x 0.1x

TPI Composites Inc TPIC US Equity $17.48 590 594 $0.71 $1.17 894 1,070 18% 20% 60 85 19% 43% 24.7x 15.0x 0.7x 0.6x 10.0x 7.0x 4.4x 3%

(1) Consensus used for all companies.

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FINANCIAL CONDITION

As of Q3’16, after raising $70mn (net of expenses) in an IPO, TPIC had a cash balance of $106mn and $110mn in debt, resulting in a net debt of $4mn. The cash raised from TPIC’s IPO is intended to be used for facility expansion and related equipment. Current assets totaled $344mn vs. current liabilities of $241mn. As of Q3’16, TPIC’s debt included a credit facility with a remaining balance of $74mn due 10/18/18 and an interest rate of LIBOR plus 8%. TPIC also has a variety of other debt in the form of equipment capital leases and loans, A/R financing agreements, and working capital loans, which totaled $37mn by the end of Q3’16. We believe that TPIC’s financial condition is stable due to its high cash balance and because most of its debt will not mature until late Q3’18.

COMPANY OVERVIEW

TPI Composites, Inc. (NASDAQ: TPIC) is the largest U.S.-based supplier of wind blade components to the wind turbine OEM market. TPIC’s customers account for ~32% of the onshore wind market, according to data by MAKE Consulting. These customers include GE, Vestas, Gamesa, and Nordex. TPIC operates wind blade production facilities in the United States, Mexico, Turkey, and China, allowing it to supply customers in key geographic markets. TPIC collaborates closely with customers on volume and blade design. TPIC typically enters into long-term supply agreements with its customers. This dynamic provides revenue visibility and allows TPIC to efficiently allocate capital. TPIC’s predecessor, Tillotson Pearson Inc., built its heritage on the manufacturing of composite structures by targeting the high-performance sail and powerboat industry. TPIC has been supplying wind blades for 15 years. It is headquartered in Scottsdale, Arizona. Exhibit 22: TPIC is a leading manufacturer of wind turbine blades.

Source: HXL website.

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Exhibit 23: Wind blades have evolved over the years to reach 60+ meter lengths. TPIC is in close collaboration with customers to design and build longer blades.


Exhibit 24: Wind turbine blades are the largest component after towers, making transportation a logistical consideration.


TPIC has manufacturing facilities in the U.S., Asia, Mexico, and Turkey and has near-term expansion planned in Mexico and Turkey. TPIC has existing facilities in both Iowa and Juarez as well as two underway in Juarez. TPIC’s Iowa facility exclusively supplies GE, while the Juarez facilities supply both GE and Gamesa. These factories can easily supply blades to the mid-continent wind corridor, a region of high wind potential with a consistently strong market. The closest U.S. state to TPIC’s Mexico facilities, Texas, exceeded renewable goals signed under Governor George W. Bush and Governor Rick Perry and now has more wind capacity than any other state in the U.S. TPIC’s facilities in Turkey are located in Izmir, on the Aegean Sea. This offers easy shipping access to Europe, where most of the blades are exported. The Izmir facilities supply Nordex, Vestas and GE. China is the largest wind market in which TPIC does business. The market is primarily served by Chinese firms while TPIC is mainly an exporter from the country. TPIC has facilities in two cities in China, Taicang and Dafeng. Most of TPIC’s blades produced in China are exported, potentially anywhere in the world with port access. Within China, the coast is a wind-rich region. Although it has no facilities in India, there is significant development along India’s west coast, representing significant energy demand. TPIC could potentially supply these markets from port facilities in China.

Balance of Nacelle10%

Generator4%

Structure2%

Converter8%

Hub & Pitch12%

Drive train19%

Tower25%

Wind Blades20%

Onshore Turbine Cost Breakdown

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Exhibit 25: TPIC’s manufacturing operations are clustered close to its customers in Iowa, Mexico, Turkey, and China.


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MANAGEMENT TPIC has a leadership team with deep experience in the technology, aerospace, and industrial manufacturing sectors. Led by CEO Stephen Lockard, the management team brings years of experience in high technology manufacturing businesses and is well equipped, in our view, to lead the business through the opportunities and challenges of the wind industry. Exhibit 26: The CEO, Mr. Steven Lockhard, took the company from boat building to blade making.


Leadership Biography

Steven C. Lockard

President, CEO, and

Director

• Joined TPIC in 1999, became President, CEO, and board member in 2004.

• Presided over the transformation of TPIC from serving the recreational watercraft market to serving the wind blade market.

• Prior offices include VP of Satloc from 1997-1999, Founder and VP of Marketing and Business Development of ADFlex

Solutions from 1993-1997, and numerous positions at Rogers Corporation from 1982 to 1993.

• Board member and co-chair of the policy committee of AWEA.

• Board member of Fluidic Energy.

• B.S. Electrical Engineering, Arizona State.

Mark R. McFeely

COO

• Joined as Chief Operating Officer in Nov. 2015.

• Prior offices include Senior VP and COO at Remy International from 2012 to 2015, VP of Operations at Meggitt Safety

Systems from 2011 to 2012, and multiple operations and leadership positions at Danaher Corporation, Honeywell, and the

Federal Emergency Management Agency before 2011.

• Bachelor's, Colorado State University; MBA, Pennsylvania State University.

Wayne G. Monie

Chief Manufacturing

Technology Officer

• Joined TPIC in 2002 as VP of Operations. Served as COO from 2004 to 2015, Asia CEO from Aug. 2015 to Mar. 2016,

and as a director from 2004 to Jul. 2016.

• Prior offices include VP of Manufacturing at First Solar (FSLR–Neutral) from 2001 to 2002, VP and General Manager at

Satloc from 1998 to 2001, General Manager of Power Distribution at Rogers Corporation from 1983 to 1998, Executive VP

at Glen-Mar Door Manufacturing Company from 1980 to 1983, Production Manager at Sperry Flight Systems from 1978 to

1980, and multiple positions at General Motors’s Delco Moraine Division from 1970 to 1978.

• B.S. Industrial Engineering, Virginia Polytechnic Institute and State University; M.S. Engineering Management, University

of Dayton.

William E. Siwek

CFO

• Joined as CFO in 2013.

• Prior offices include CFO at the TW Lewis Company from Sep. 2012 to Sep. 2013, independent consultant to real estate,

construction, insurance, and renewable energy from May 2010 to Sep. 2012, Executive VP and CFO at Talisker Mountain

from Jan. 2009 to Apr. 2010, President and CFO at the Lyle Anderson Company from Dec. 2002 to Dec. 2008, and Partner

at Arthur Anderson from Sep. 1984 to May 2002.

• B.S. Accounting and Economics, University of Redlands; CPA holder.

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RECENT RESULTS

Q3’16. TPIC posted EPS of $0.08 vs consensus of -$0.10. Revenues of $199mn beat consensus of $192mn. 11% gross margins beat consensus of 7.2%. Key takeaways include: (1) TPIC extended and expanded contracts with GE in Iowa and Mexico through 2020. TPIC also expanded agreements with Nordex in Turkey, adding two additional lines; (2) GE announced a proposed acquisition of LM Wind at 8.3x 2016E EBITDA ($1.65bn); and (3) TPIC delivered a 581 blade sets estimated at 1,321MW, up from 433 blade sets estimated at 987MW in Q3’15.

Q2’16. TPIC posted Q2’16 revenues of $194mn, a gross margin of 11.7%, and EPS of 44c. Key takeaways include: (1) Q2 results were driven by increased production and YoY increases in net sales, total billings, and EBITDA; (2) TPIC delivered margin expansion in the quarter due to improved efficiency and near 100% utilization of 27 manufacturing lines; and (3) TPIC completed its IPO in July issuing ~7.2mn shares at $11/share.

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APPENDIX We present below our detailed global wind demand forecast by key countries. We forecast 56GW of demand in 2017 (up 18% YoY) and 58GW of demand in 2018 (up 3% YoY). From 2018-2020 we expect demand to be flat to slightly down given potential weakness in China. We forecast China’s demand to fall from 22GW in 2017 to 11GW in 2020 due to recent changes in China’s policy driven by a slowdown of the overall economy, excess power generation capacity, and curtailment in renewables. We believe this could be offset by growth in other regions such as North America, which we forecast to increase from 11GW in 2017 to 15GW in 2020. Exhibit 27: EMEA represents a stable source of demand for wind demand.


Global Wind Demand (GW) 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E

EMEA

Germany 1.9 2.2 3.0 4.9 5.9 2.9 3.1 3.1 3.1 3.3YoY growth 34% 15% 39% 61% 21% (51%) 7% (0%) 0% 6%

Cumulative installations 29.1 31.3 34.3 39.2 45.1 48.0 51.1 54.2 57.3 60.6

France 1.1 0.8 0.7 1.0 1.1 1.0 3.2 2.3 2.1 2.5YoY growth (8%) (27%) (12%) 43% 10% (9%) 220% (28%) (9%) 19%


UK 1.3 2.1 1.9 1.9 1.2 1.4 1.5 1.5 1.5 1.5YoY growth 7% 62% (10%) 0% (37%) 17% 7% (0%) 0% (0%)


Spain 1.0 1.1 0.2 0.0 0.0 0.6 0.6 0.6 0.6 0.6YoY growth (37%) 10% (82%) (100%) NA NA (0%) 0% (0%) 0%


Poland 0.5 0.9 0.9 0.4 1.3 0.9 1.4 1.4 1.4 1.3YoY growth 32% 80% 0% (56%) 225% (31%) 56% 0% 0% (7%)


Denmark 0.2 0.2 0.6 0.1 0.2 0.3 0.3 0.3 0.3 0.4YoY growth (33%) 0% 200% (83%) 100% 50% (0%) 0% (0%) 33%


Rest of Europe 4.7 5.5 4.4 4.3 4.2 6.2 3.4 5.3 5.5 5.4YoY growth 12% 17% (20%) (3%) (1%) 48% (45%) 56% 4% (2%)


Europe -- Total 10.7 12.8 11.7 12.5 13.9 13.3 13.5 14.5 14.5 15.0YoY growth 4% 20% (8%) 7% 11% (4%) 1% 7% (0%) 3%

Cumulative installations -- Calculated 97.1 109.8 121.5 134.1 148.0 161.3 174.8 189.3 203.8 218.8

Egypt 0.0 0.0 0.0 0.1 0.2 0.4 0.4 0.4 0.5 0.5YoY growth (100%) NA NA NA 233% 95% 3% (0%) 25% (6%)


Morocco 0.0 0.0 0.2 0.3 0.0 0.2 0.2 0.2 0.2 0.2YoY growth (85%) (100%) NA 53% (100%) NA (6%) 0% 0% (0%)


South Africa 0.0 0.0 0.0 0.6 0.5 0.9 1.0 1.0 1.0 1.0YoY growth NA NA NA 27,900% (14%) 96% 6% 0% 0% 0%


Rest of MEA (0.0) 0.1 0.2 0.0 0.3 (0.0) 0.9 1.4 2.3 3.3YoY growth (180%) (457%) 81% (94%) 1,829% (114%) (2,408%) 56% 64% 45%


MEA -- Total (0.0) 0.1 0.4 0.9 1.0 1.5 2.5 3.0 4.0 5.0YoY growth (116%) (513%) 231% 114% 2% 59% 65% 20% 33% 25%


EMEA -- Total 10.6 12.9 12.2 13.5 14.9 14.8 16.0 17.5 18.5 20.0YoY growth 2% 21% (6%) 11% 10% (0%) 8% 9% 6% 8%


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Exhibit 28: Despite weakness in the country near-term, China will continue to impact demand on the margin given swings in demand, and the U.S. is the key driver in the Americas. We see global demand ex-China growing at a steady single digit clip through 2020 on average.


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In the following section we present exhibits for many of key players in the global wind industry. We present exhibits on the sales mix for each company (when info is available) and include global maps with details on each company’s global manufacturing facilities.

1. EU: Gamesa

Exhibit 29: Based in Spain, Gamesa generates revenue from manufacturing wind turbines and O&M.

Source: GAM 2015 annual report; ROTH Capital Partners.

Exhibit 30: Compared with its peers, a higher percentage of Gamesa’s revenue comes from emerging markets.

Source: GAM 2015 annual report; ROTH Capital Partners.

Exhibit 31: Gamesa’s operations are highly concentrated in Spain. Gamesa also has turbine and blade facilities in fast growing emerging markets.


Wind Turbine Generator87%

O&M13%

GAM -- 2015 Sales by Business LineTotal = EUR 3.5bn as of 2/25/16

Europe21%

U.S.13%

China8%

India23%

Brazil18%

Mexico5%

Rest of the world12%

GAM -- 2015 Sales by GeographyTotal = EUR 3.5bn as of 2/25/16

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2. EU: LM Wind

Exhibit 32: Although LM Wind is headquartered in Denmark, the company has a diverse international manufacturing capacity.

Source: LM Wind 2015 annual report; ROTH Capital Partners. Exhibit 33: Pending an acquisition by GE, LM Wind is the largest blade manufacturer that competes directly with TPIC. LM Wind and TPIC each have facilities in North America, Europe, and China, though only LM Wind operates blade facilities in India and Brazil.


Europe24%

Americas32%

Asia44%

LM Wind Power -- 2015 Sales by GeographyTotal = EUR 750.3mn as of 2/29/16

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3. EU: Senvion

Exhibit 34: Based in Germany, Senvion is a turbine OEM that went public in 2016.

Source: SEN 2015 annual report; ROTH Capital Partners.

Exhibit 35: The company generates a majority of its revenue in the EU.

Source: SEN 2015 annual report; ROTH Capital Partners.

Exhibit 36: Senvion recently announced the acquisition of Kenersys in Aug’16, giving the company a presence in India.


Onshore Turbines85%

Offshore Turbines5%

Services10%

SEN -- 2015 Sales by Business LineTotal = EUR 1.6bn as of 4/29/16

Germany39%

Canada18%

UK13%

France8%

Australia2%

Rest of World20%

SEN -- 2015 Onshore Sales by GeographyTotal = EUR 1.3bn as of 4/29/16

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4. EU: Siemens

Exhibit 37: Siemens is a highly diversified industrial. It is in the process of acquiring Gamesa which would...

Source: SIE 2016 annual report; ROTH Capital Partners.

Exhibit 38: …substantially expand its wind business. This would diversify Siemens out of its current developed-market focus.

Source: SIE 2016 annual report; ROTH Capital Partners.

Exhibit 39: Siemens is in the process of expanding its facility in England and is planning to build a new facility in Egypt. The proposed merger with Gamesa would add capacity in Spain, Brazil, and India.


Power and Gas20%

Energy Management15%

Wind and Renewables7%

Building Technologies8%

Digital Factory12%

Mobility10%

Process Industries and Drives

11%

Healthineers17%

SIE -- FY'16 Sales by Business LineTotal = EUR 79.6bn as of 11/30/16

Other EMEA39%

Germany14%

Other Americas7%

U.S.21%

Other Asia Pacific11%

China8%

SIE -- FY'16 Sales by GeographyTotal = EUR 79.6bn as of 11/30/16

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5. EU: Vestas

Exhibit 40: Vestas’s revenue comes largely from turbine manufacturing with the balance from service.

Source: VWS 2015 annual report; ROTH Capital Partners.

Exhibit 41: Historically, the company has had limited exposure to Asia and greater exposure to developed markets.

Source: VWS 2015 annual report; ROTH Capital Partners.

Exhibit 42: Vestas has an evenly distributed component manufacturing base across developed and emerging markets with both turbine and blade factories located in most regions.


Equipment 86%

Service14%

VWS -- 2015 Sales by Business LineTotal = EUR 8.4bn as of 2/9/16

EMEA52%

Americas41%

Asia Pacific7%

VWS -- 2015 Sales by GeographyTotal = EUR 8.4bn as of 2/9/16

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6. NA: Broadwind Energy

Exhibit 43: Headquartered in Illinois, Broadwind Energy’s revenue mix has become increasingly more skewed to towers over recent quarters

Source: BWEN Q3’16 earnings release; ROTH Capital Partners.

Exhibit 44: Broadwind’s tower and gearing facilities primarily supply turbine OEMs in the United States. The gearing facilities also supply other energy customers in oil and gas.

Source: SEC filings; Company websites and reports; ROTH Capital Partners.

Towers, 89%

Gearing, 11%

BWEN -- Q3'16 Sales by Business LineTotal = $42.6mn as of 9/30/16

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7. NA: General Electric

Exhibit 45: GE is one of the world’s largest conglomerates…

Source: GE 2015 annual report; ROTH Capital Partners.

Exhibit 46: …and operates a geographically diverse portfolio.

Source: GE 2015 annual report; ROTH Capital Partners.

Exhibit 47: GE has a diversified turbine manufacturing base across developed and emerging markets. GE does not have blade manufacturing capacity other than a research facility in New Orleans, LA, but is in the process of acquiring LM Wind Power.


Power20%

Renewable Energy7%

Oil & Gas11%

Aviation21%

Healthcare15%

Transportation4%

Energy Connections & Lighting

13%

Capital9%

GE -- Q1-Q3'16 Sales by Business LineTotal = $90.6bn as of 9/30/16

US45%

Europe14%

Asia17%

Americas10%

Middle East & Africa14%

GE -- 2015 Sales by GeographyTotal = $90.6bn as of 9/30/16

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8. NA: Hexcel Exhibit 48: The wind segment was only ~7% of Hexcel’s 2015 revenue.

Source: HXL 2015 annual report; ROTH Capital Partners.

Exhibit 49: The vast majority of Hexcel’s wind business is driven by one customer, Vestas.

Source: HXL 2015 annual report; ROTH Capital Partners.

Exhibit 50: Hexcel serves its key customer, Vestas, from three locations – Austria, China, and Colorado.


Wind7%

Space & Defense18%

Commercial Aerospace69%

Industrial6%

HXL -- 2015 Sales by Business LineTotal = $1.9bn as of 12/31/15

US46%

Europe37%

Other17%

HXL -- 2015 Sales by GeographyTotal = $1.9bn as of 12/31/15

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9. China: Goldwind Exhibit 51: Goldwind produced 7.9GW of turbines in 2015.

Source: Goldwind 2015 annual report; ROTH Capital Partners.

Exhibit 52: Goldwind is the largest turbine OEM in China.

Source: Goldwind 2015 annual report; ROTH Capital Partners.

Exhibit 53: Goldwind is largely state-owned, and a majority of its manufacturing is located in China.

Source: Company filings, websites and reports; ROTH Capital Partners.

Wind turbines & parts91%

Wind service4%

Wind farm development5%

Goldwind -- 2015 Sales by Business LineTotal = $4.8bn as of 12/31/15

China92%

Other8%

Goldwind -- 2015 Sales by GeographyTotal = $4.8bn as of 12/31/15

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10. China: LianZhong Exhibit 54: LianZhong, a private Chinese company, is one of the largest blade manufacturers in China with operations largely based in China.


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11. China: Ming Yang

Exhibit 55: Ming Yang is a turbine OEM that went private in 2016.

Source: MY 2015 annual report; ROTH Capital Partners. Exhibit 56: Ming Yang operates a 3.9mn sq ft turbine and blade facility. Most of Ming Yang’s facilities are in China, comprised of a combination of turbine and blade factories.


Wind turbines94%

Wind blades & parts4%

Other2%

MY -- 2015 Sales by Business LineTotal = $1.0bn as of 12/31/15

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12. China: United Power

Exhibit 57: United Power is a Chinese state-owned company that operates a number of large wind facilities, including one 7.3mn sq ft plant.


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13. China: Sinoma Exhibit 58: Sinoma makes blades and composite materials that serve the blade market.

Source: Sinoma 2015 annual report; ROTH Capital Partners.

Exhibit 59: It is controlled by China’s government and is 23% state-owned. Nearly all revenues were based in China.

Source: Sinoma 2015 annual report; ROTH Capital Partners.

Exhibit 60: Sinoma has blade making facilities with access to the northern and coastal wind-rich regions of China.


Blade69%

Other specialty fiber composites

27%

Other4%

Sinoma -- 2015 Sales by Business LineTotal = $927.5mn as of 12/31/15

China97%

Other3%

Sinoma -- 2015 Sales by GeographyTotal = $927.5mn as of 12/31/15

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14. China: Sinovel

Exhibit 61: Sinovel shipped 440MW of wind turbines in 2015.

Source: Sinovel 2015 annual report; ROTH Capital Partners.

Exhibit 62: Most of Sinovel’s sales were based in China.

Source: Sinovel 2015 annual report; ROTH Capital Partners.

Exhibit 63: Sinovel has at least two 3.6mn sq ft turbine factories. Its factories are located in the north and coastal high-wind regions.


Wind turbines98%

Other2%

Sinovel -- 2015 Sales by Business LineTotal = $221.1mn as of 12/31/15

China89%

Other11%

Sinovel -- 2015 Sales by GeographyTotal = $221.1mn as of 12/31/15

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15. India: Inox Wind

Exhibit 64: Based in Uttar Pradesh, Inox Wind is an Indian-based turbine OEM.

Source: Inox Wind 2016 annual presentation; ROTH Capital Partners. Exhibit 65: Inox Wind doubled its manufacturing capacity in 2016 to 1.6GW per year with the addition of the Madhya Pradesh facility.


Wind Turbine Generators and

Components 86%

Wind Services 14%

Inox -- FY'16 Sales by Business LineTotal = $673.8mn as of 3/31/16

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16. India: ReGen Powertech

Exhibit 66: ReGen Powertech is a private wind turbine OEM with operations concentrated in India.


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17. India: Suzlon

Exhibit 67: Suzlon derives a majority of its revenue from India but also has some sales in the U.S. and Europe.

Source: Bloomberg; Suzlon 2016 annual report; ROTH Capital Partners. Exhibit 68: Suzlon’s turbine and blade facilities are concentrated on the west coast of India, a region of high energy demand with ocean freight access.


India 79%

Europe11%

Others 10%

Suzlon -- FY'16 Sales by GeographyTotal = $1.5bn as of 3/31/16

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VALUATION

■ We establish our $23 price target by applying an 8.8x EV/EBITDA multiple to our discounted 2018 EBITDAestimate.

■ Factors that could impede shares of TPIC from reaching our price target include (1) a reduction in globaldemand for wind power; (2) a decline in purchases by any of TPIC's main customers; and (3) geopoliticalinstability leading to headwinds to TPIC's international operations.

RISKS

■ Customer Concentration. For the three months ended Sep'16, TPIC's largest four customers accountedfor 99% of revenue, and we estimate that GE accounted for 55% of revenue. A loss or reduction of demandfrom any one customer could substantially impair TPIC's growth prospects.

■ Industry Consolidation. Mergers of turbine OEMs increase the risk that customers may limit TPIC'sbargaining power.

■ Manufacturing Defects. Defects in design, engineering, and manufacturing could lead to componentfailures. In 2010, the qualification of the Iowa factory was postponed due to testing failures, resulting inmanufacturing delays.

■ Fluctuating Demand. Revenues depend heavily on the continued growth of the wind industry. Factors thatmay influence demand include general economic conditions, availability and demand for electricity, windenergy market volatility, and government subsidies and regulations.

■ Limited Number of Suppliers. TPIC's components are manufactured by a small number of qualifiedsuppliers. Interruption of supply could impact TPIC's ability to deliver its products in a timely manner.

■ Country Risk. TPIC operates in a variety of countries and is subject to the economic, regulatory, social,and political uncertainties of each region.

■ Customer Business Model Risk. If customers do not continue to shift blade production to an outsourcingmodel, TPIC may not achieve its long-term growth targets.

■ Customer Acquisition. TPIC's largest customer, GE, recently announced its intent to acquire TPIC's largestcompetitor, LM Wind Power. If successful, this acquisition could result in a reduction of GE's demand foroutsourced wind blades, adversely affecting TPIC's future revenue.

■ Renewable Electricity Prices. Customer decisions to buy wind blades are driven to a large degree by therelative cost of electricity. A decline in the price of non-wind electricity may materially harm TPIC's business.

COMPANY DESCRIPTION

TPI Composites, Inc. (NASDAQ: TPIC) supplies wind turbine blades to turbine OEMs acrossinternational markets. Headquartered in Scottsdale, Arizona, TPIC has manufactured more than 26k bladesover the last 15 years. TPIC operates in close collaboration with its customers to develop manufacturingprocesses for innovative blade sizes and designs. TPIC’s customers include some of the largest turbine OEMssuch as GE, Vestas, Nordex, and Gamesa. The company operates wind blade production facilities in theUnited States, Mexico, Turkey, and China, serving its customers in key geographic markets.

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TPI COMPOSITES, INC. Company Note - January 17, 2017TPI Composites, Inc. Philip Shen, ROTH Capital Partners(NASDAQ: TPIC) [email protected], 949 720-7198

Income Statement (1) Q1'16 Q2'16 Q3'16 Q4'16E 2016E Q1'17E Q2'17E Q3'17E Q4'17E 2017E Q1'18E Q2'18E Q3'18E Q4'18E 2018EUSD in millions (except per share data) Mar-16 Jun-16 Sep-16 Dec-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Dec-18

Revenue 176.1 194.3 198.9 187.1 756.4 209.5 215.9 222.4 233.0 880.7 245.7 271.2 283.9 303.0 1,103.9Consensus revenues (Jan 13, 2017) 192.9 758.0 205.7 233.1 251.8 251.4 936.0 1,134.8

YoY growth 84.2% 29.7% 23.1% 4.6% 29.1% 19.0% 11.2% 11.8% 24.5% 16.4% 17.3% 25.6% 27.7% 30.1% 25.3%

QoQ growth -1.6% 10.3% 2.4% -5.9% 11.9% 3.1% 3.0% 4.8% 5.5% 10.4% 4.7% 6.7%

Cost of sales 159.9 168.4 171.6 172.1 672.0 190.5 192.1 195.6 204.9 783.1 219.9 242.7 254.1 271.2 987.8

Startup and transition costs 3.3 3.1 5.1 5.3 16.7 6.0 6.0 7.0 7.0 26.0 4.0 4.0 4.0 4.0 16.0

Total COGS 163.2 171.4 176.7 177.4 688.7 196.5 198.1 202.6 211.9 809.1 223.9 246.7 258.1 275.2 1,003.8

Gross profit 12.9 22.8 22.2 9.8 67.7 13.0 17.9 19.8 21.1 71.6 21.8 24.5 25.9 27.9 100.1Gross margin 7.3% 11.7% 11.2% 5.2% 9.0% 6.2% 8.3% 8.9% 9.0% 8.1% 8.9% 9.0% 9.1% 9.2% 9.1%

Consensus gross margin (Jan 13, 2017) 5.0% 9.4% 6.5% 9.4% 10.2% 9.6% 8.7% 7.2% 9.4% 10.2% 10.8% 9.2%

G&A 4.7 5.3 14.1 7.0 31.2 7.3 7.4 7.5 7.5 29.7 7.5 7.5 7.8 8.0 30.8

% of revenue 2.7% 2.7% 7.1% 3.7% 4.1% 3.5% 3.4% 3.4% 3.2% 3.4% 3.1% 2.8% 2.7% 2.6% 2.8%

Total opex 4.7 5.3 14.1 7.0 31.2 7.3 7.4 7.5 7.5 29.7 7.5 7.5 7.8 8.0 30.8

% of revenue 2.7% 2.7% 7.1% 3.7% 4.1% 3.5% 3.4% 3.4% 3.2% 3.4% 3.1% 2.8% 2.7% 2.6% 2.8%

YoY growth 48.0% 84.2% 310.9% 52.3% 120.5% 53.7% 38.6% -46.7% 7.1% -4.7% 2.7% 1.4% 4.0% 6.7% 3.7%

EBIT 8.2 17.5 8.1 2.8 36.6 5.7 10.5 12.3 13.6 41.9 14.3 17.0 18.1 19.9 69.3Operating margin 4.6% 9.0% 4.1% 1.5% 4.8% 2.7% 4.8% 5.5% 5.8% 4.8% 5.8% 6.3% 6.4% 6.6% 6.3%

Interest income 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Interest expense (3.9) (4.1) (4.7) (3.3) (16.0) (2.8) (2.8) (2.8) (2.8) (11.2) (2.8) (2.8) (2.8) (2.8) (11.2)

Loss on extinguishment of debt 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Realized loss on FX remeasurement (0.4) (0.0) (0.2) 0.0 (0.7) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Miscellaneous income 0.2 0.2 (0.2) 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total other expense (4.1) (4.0) (5.0) (3.3) (16.4) (2.8) (2.8) (2.8) (2.8) (11.2) (2.8) (2.8) (2.8) (2.8) (11.2)

EBT 4.0 13.5 3.1 (0.5) 20.1 2.9 7.7 9.5 10.8 30.7 11.5 14.2 15.3 17.1 58.1Income tax benefit/(provision) (2.3) (2.0) (0.3) (1.4) (6.0) (0.7) (1.9) (2.4) (2.7) (7.7) (2.9) (3.6) (3.8) (4.3) (14.5)

Effective tax rate 56.9% 14.5% 9.9% 25.0% 29.6% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0%

Net income/(loss) 1.7 11.6 2.8 (1.9) 14.2 2.1 5.7 7.1 8.1 23.1 8.7 10.7 11.4 12.8 43.6

Net income attributable to preferred 0.0 0.0 0.6 0.0 (5.7) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Net income -- Continuing 1.7 11.6 2.2 (1.9) 13.6 2.1 5.7 7.1 8.1 23.1 8.7 10.7 11.4 12.8 43.6Net margin 1.0% 5.9% 1.1% -1.0% 1.8% 1.0% 2.7% 3.2% 3.5% 2.6% 3.5% 3.9% 4.0% 4.2% 3.9%

Extraordinary items/Non-recurring items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Discontinued operations 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Net income -- GAAP 1.7 11.6 2.2 (1.9) 13.6 2.1 5.7 7.1 8.1 23.1 8.7 10.7 11.4 12.8 43.6

EPS -- Core $0.07 $0.44 $0.08 ($0.06) $0.52 $0.06 $0.17 $0.21 $0.24 $0.68 $0.26 $0.32 $0.34 $0.38 $1.29YoY growth 130.4% 181.2% 199.3% -113.2% 81.2% -3.6% -61.0% 162.2% 518.3% 30.2% 304.7% 85.9% 61.0% 58.7% 89.0%

Consensus EPS (Jan 13, 2017) ($0.16) $0.34 ($0.04) $0.14 $0.20 $0.13 $0.50 ($0.07) $0.10 $0.16 $0.22 $1.55

Extraordinary items/Non-recurring items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Discontinued operations 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

EPS -- GAAP $0.07 $0.44 $0.08 ($0.06) $0.52 $0.06 $0.17 $0.21 $0.24 $0.68 $0.26 $0.32 $0.34 $0.38 $1.29

Weighted avg common shares outstanding

Basic 26.5 26.5 27.3 33.7 28.5 33.7 33.7 33.7 33.7 33.7 33.7 33.7 33.7 33.7 33.7

Diluted 26.5 26.5 27.4 33.7 28.6 33.7 33.7 33.7 33.7 33.7 33.7 33.7 33.7 33.7 33.7

EBITDA 11.0 20.8 11.3 7.5 50.5 10.6 15.7 17.8 19.3 63.3 20.3 23.5 24.7 26.9 95.4Share-based compensation expense 0.0 0.0 8.1 1.8 9.9 1.8 1.8 1.8 1.8 7.2 1.8 1.8 1.8 1.8 7.2

Realized loss on FX 0.4 0.0 0.2 0.0 0.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Adjusted EBITDA 11.4 20.8 19.6 9.3 61.1 12.4 17.5 19.6 21.1 70.5 22.1 25.3 26.5 28.7 102.6(1) Historical EPS prior to Q3'16 calculated using a pro-forma sharecount.

Source: SEC filings and press releases; ROTH Capital Partners estimates.

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Balance Sheet Q1'16 Q2'16 Q3'16 Q4'16E 2016E Q1'17E Q2'17E Q3'17E Q4'17E 2017E Q1'18E Q2'18E Q3'18E Q4'18E 2018EUSD in millions (except per share data) Mar-16 Jun-16 Sep-16 Dec-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Dec-18

Surplus funds 53.3 53.3 51.0 43.2 32.0 39.6 39.6 42.9 31.2 24.4 46.0 46.0Cash 35.8 31.1 106.8

Total cash 35.8 31.1 106.8 53.3 53.3 51.0 43.2 32.0 39.6 39.6 42.9 31.2 24.4 46.0 46.0Restricted cash 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4

A/R 87.0 87.6 100.2 94.2 94.2 103.5 97.3 111.9 109.8 109.8 121.4 122.2 142.9 142.8 142.8

Inventory 54.8 52.7 58.8 107.5 107.5 119.0 120.0 122.2 128.0 128.0 137.3 151.6 158.7 166.4 166.4

Inventories held for customer orders 50.9 50.1 48.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Prepaid expenses and other current assets 39.7 41.0 26.4 34.4 34.4 38.1 38.4 39.1 41.0 41.0 44.0 48.5 50.8 54.2 54.2

Total current assets 270.7 264.8 342.8 291.8 291.8 314.0 301.4 307.6 320.8 320.8 348.0 356.0 379.3 411.9 411.9PPE, net 74.9 73.6 78.6 109.6 109.6 115.7 121.6 127.4 133.1 133.1 143.2 148.0 155.5 157.8 157.8

Goodwill 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Intangibles, net 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other noncurrent assets 12.8 14.3 17.7 18.0 18.0 25.0 25.0 30.0 30.0 30.0 30.0 35.0 35.0 35.0 35.0

Total assets 358.5 352.6 439.1 419.5 419.5 454.7 447.9 465.0 483.9 483.9 521.2 539.0 569.9 604.7 604.7Necessary to finance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0A/P and accrued expenses 105.3 99.8 107.3 92.8 92.8 113.9 98.6 105.5 110.5 110.5 131.5 124.6 137.1 148.6 148.6

Accrued warranty 27.9 30.6 31.1 31.0 31.0 34.3 34.6 35.2 36.9 36.9 39.6 43.7 45.7 48.8 48.8

Notes payable 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Deferred revenue 65.0 65.7 61.9 59.9 59.9 67.0 69.1 71.2 74.6 74.6 78.6 86.8 90.9 97.0 97.0

Customer deposits and advances 13.4 10.6 13.8 12.7 12.7 14.2 14.7 15.1 15.8 15.8 16.7 18.4 19.3 20.6 20.6

Current LTD , net discount 53.6 27.3 27.2 27.2 27.2 27.2 27.2 27.2 27.2 27.2 27.2 27.2 27.2 27.2 27.2

Total current liabilities 265.4 234.0 241.3 223.6 223.6 256.7 244.2 254.2 265.0 265.0 293.6 300.7 320.1 342.2 342.2LTD, net of discount and current maturities 69.6 83.9 83.8 83.8 83.8 83.8 83.8 83.8 83.8 83.8 83.8 83.8 83.8 83.8 83.8

Other noncurrent liabilities 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3

Total liabilities 339.2 322.2 329.3 311.6 311.6 344.7 332.2 342.2 353.0 353.0 381.6 388.7 408.2 430.2 430.2Total stockholder's equity 19.3 30.453 109.8 107.9 107.9 110.0 115.7 122.8 130.9 130.9 139.6 150.2 161.7 174.5 174.5Total liabilities and equity 358.5 352.6 439.1 419.5 419.5 454.7 447.9 465.0 483.9 483.9 521.2 539.0 569.9 604.7 604.7Check 0.0 0.0 (0.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Balance Sheet Supporting Schedules Q1'16 Q2'16 Q3'16 Q4'16E 2016E Q1'17E Q2'17E Q3'17E Q4'17E 2017E Q1'18E Q2'18E Q3'18E Q4'18E 2018EUSD in millions (except per share data) Mar-16 Jun-16 Sep-16 Dec-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Dec-18

Working CapitalA/R turnover 8.8x 8.9x 8.5x 7.7x 9.1x 8.5x 8.6x 8.5x 8.4x 8.6x 8.5x 8.9x 8.6x 8.5x 8.7x

Inventory turnover 12.1x 12.5x 12.3x 8.3x 8.5x 6.7x 6.4x 6.5x 6.6x 6.7x 6.6x 6.7x 6.6x 6.7x 6.7x

A/P turnover 6.2x 6.6x 6.6x 6.9x 6.9x 7.4x 7.2x 7.7x 7.6x 7.7x 7.3x 7.6x 7.8x 7.6x 7.6x

Days sales outstanding (DSO) 45 41 46 46 45 45 41 46 43 45 45 41 46 43 47

Days per inventory turn (DOH) 31 29 31 57 58 57 57 57 57 60 57 57 57 56 61

Days payables outstanding (DPO) 55 47 49 49 45 55 47 49 49 46 55 47 49 50 49

Cash conversion cycle 131 117 126 152 149 157 145 152 149 151 157 145 152 149 158

Change in working capitalCurrent assets (excluding cash) 234.8 233.7 236.0 238.5 238.5 263.1 258.1 275.6 281.2 281.2 305.2 324.8 354.9 365.9 365.9

Current liabilities 265.4 234.0 241.3 223.6 223.6 256.7 244.2 254.2 265.0 265.0 293.6 300.7 320.1 342.2 342.2

Working capital (30.5) (0.2) (5.3) 14.9 14.9 6.4 14.0 21.5 16.2 16.2 11.6 24.1 34.7 23.7 23.7(Increase)/decrease in working capital (4.2) (30.3) 5.0 (20.2) (49.7) 8.6 (7.6) (7.5) 5.3 (1.2) 4.6 (12.5) (10.7) 11.0 (7.5)

Other drivers -- % of sales or COGSPrepaid expenses and other current assets 6.2% 6.1% 3.8% 5.0% 5.1% 5.0% 5.0% 5.0% 5.0% 5.2% 5.0% 5.0% 5.0% 5.0% 5.5%

LT deferred revenues 9.2% 8.4% 7.8% 8.0% 7.9% 8.0% 8.0% 8.0% 8.0% 8.5% 8.0% 8.0% 8.0% 8.0% 8.8%

Accrued warranty 4.4% 4.5% 4.5% 4.5% 4.6% 4.5% 4.5% 4.5% 4.5% 4.7% 4.5% 4.5% 4.5% 4.5% 4.9%

Customer deposits and advances 1.9% 1.4% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% 1.8% 1.7% 1.7% 1.7% 1.7% 1.9%

LiquidityCurrent ratio 1.0x 1.1x 1.4x 1.3x 1.3x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x

Quick ratio 0.8x 0.9x 1.2x 0.8x 0.8x 0.8x 0.7x 0.7x 0.7x 0.7x 0.7x 0.7x 0.7x 0.7x 0.7x

Cash ratio 0.1x 0.1x 0.4x 0.2x 0.2x 0.2x 0.2x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x

Financial leverage, endingDebt, ending 123.2 111.3 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9

Debt, average 126.3 117.2 111.1 110.9 120.1 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9 110.9

Debt/equity 6.4x 3.7x 1.0x 1.0x 1.0x 1.0x 1.0x 0.9x 0.8x 0.8x 0.8x 0.7x 0.7x 0.6x 0.6x

Debt/total capital 115.5% 100.5% 97.4% 67.0% 67.0% 65.3% 60.5% 55.0% 54.9% 54.9% 53.4% 48.2% 44.7% 46.3% 46.3%

Debt/EBITDA, annualized 2.7x 1.3x 2.4x 3.7x 2.2x 2.6x 1.8x 1.6x 1.4x 1.8x 1.4x 1.2x 1.1x 1.0x 1.2x

Net debt/equity 452.6% 263.3% 3.8% 53.4% 53.4% 54.5% 58.5% 64.2% 54.4% 54.4% 48.8% 53.0% 53.5% 37.2% 37.2%

Net debt/total capital 81.9% 72.5% 3.6% 34.8% 34.8% 35.3% 36.9% 39.1% 35.3% 35.3% 32.8% 34.7% 34.8% 27.1% 27.1%

Net debt/EBITDA, annualized 195.0% 97.1% 8.8% 192.3% 113.0% 141.6% 108.1% 111.1% 92.4% 112.6% 83.7% 84.9% 87.4% 60.4% 68.1%

Financial returnsROE decomposition -- Dupont formula -8.1% 185.8% 12.6% -7.1% -32.6% 7.9% 20.3% 23.8% 25.4% 19.3% 25.6% 29.5% 29.4% 30.5% 28.5%

Return on sales 1.0% 5.9% 1.1% -1.0% 1.8% 1.0% 2.7% 3.2% 3.5% 2.6% 3.5% 3.9% 4.0% 4.2% 3.9%

Asset turnover 2.0x 2.2x 2.0x 1.7x 2.0x 1.9x 1.9x 1.9x 2.0x 1.9x 2.0x 2.0x 2.0x 2.1x 2.0x

Return on assets, after taxes 2.0% 13.0% 2.2% -1.8% 3.6% 2.0% 5.1% 6.2% 6.8% 5.1% 6.9% 8.1% 8.3% 8.7% 8.0%

Financial leverage -4.0x 14.3x 5.6x 3.9x -9.0x 4.0x 4.0x 3.8x 3.7x 3.8x 3.7x 3.7x 3.6x 3.5x 3.6x

Return on equity (avg equity) -8.1% 185.8% 12.6% -7.1% -32.6% 7.9% 20.3% 23.8% 25.4% 19.3% 25.6% 29.5% 29.4% 30.5% 28.5%Check 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Return on equity (beginning equity) -3.7% 239.5% 28.9% -7.0% -7.1% 7.9% 20.9% 24.6% 26.3% 21.4% 26.5% 30.6% 30.5% 31.7% 33.3%Return on invested capital (ROIC) -2517.8% 55.0% 26.1% 6.0% 89.2% 10.1% 17.7% 19.1% 20.1% 17.1% 21.0% 23.3% 22.7% 24.5% 23.5%Source: SEC filings and press releases; ROTH Capital Partners estimates.

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Statement of Cash Flows Q1'16 Q2'16 Q3'16 Q4'16E 2016E Q1'17E Q2'17E Q3'17E Q4'17E 2017E Q1'18E Q2'18E Q3'18E Q4'18E 2018EUSD in millions (except per share data) Mar-16 Jun-16 Sep-16 Dec-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Dec-18

Net income/(loss) 1.7 11.6 2.8 (1.9) 14.2 2.1 5.7 7.1 8.1 23.1 8.7 10.7 11.4 12.8 43.6

Provision for doubtful accounts

Loss on disposal of property and equipment

D&A 3.0 3.2 3.5 4.7 14.4 4.9 5.2 5.5 5.7 21.3 6.0 6.4 6.7 7.0 26.1

Amortization of debt discount 0.8 0.8 1.5 3.0

Amortization of debt issuance costs 0.4 0.4 0.4 1.3

Loss on extinguishment of debt 0.0 0.0

Share-based compensation expense 0.0 0.0 8.1 8.1

Loss on investment in joint venture 0.0 0.0

Amortization of discount on customer advances 0.0 0.0

Deferred income taxes 0.0 0.0

Other non-current assets (0.3) (0.3) (7.0) 0.0 (5.0) 0.0 (12.0) 0.0 (5.0) 0.0 0.0 (5.0)

Other non-current liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Changes in Operating assets and liabilities:

Net change in working capital (7.1) (4.6) 1.4 (20.2) (30.4) 8.6 (7.6) (7.5) 5.3 (1.2) 4.6 (12.5) (10.7) 11.0 (7.5)Cash provided/(used) in operating activities (1.1) 11.3 17.8 (17.8) 10.2 8.6 3.4 0.1 19.1 31.2 19.2 (0.4) 7.4 30.8 57.1Purchase of PP&E (10.9) (3.4) (4.7) (35.7) (54.6) (11.0) (11.1) (11.3) (11.5) (44.8) (16.0) (11.3) (14.2) (9.3) (50.8)

Proceeds from the sale of PP&E

Contribution of joint venture

Cash provided/(used) in investing activities (10.9) (3.4) (4.7) (35.7) (54.6) (11.0) (11.1) (11.3) (11.5) (44.8) (16.0) (11.3) (14.2) (9.3) (50.8)Proceeds from issuance of common stock 67.2 0.0 67.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Proceeds from terms loans 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Repayments of term loans (0.6) 0.0 (0.6) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Net proceeds from (repayments of) accounts receivable financing 6.8 (15.4) 2.5 (6.1)

Proceeds from working capital loans (5.0) 4.2 (3.3) (4.1)

Repayment of working capital loans

Proceeds from subordinated debt arrangements

Proceeds from (repayments of) other financing arrangements (1.2) (1.5) (0.8) (3.4)

Debt issuance costs

Payment of acquisition of noncontrolling interest

Proceeds from customer advances 2.0 0.0 (2.0) 0.0

Repyaments of customer advances

Proceeds from issuance of preferred stock

Restricted cash (0.6) (0.0) (0.0) (0.6)

Necessary to finance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Cash provided/(used) in financing activities 2.0 (12.6) 63.0 0.0 52.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Effect of exchange rate changes on cash and cash equivalents (0.1) (0.1) (0.4)

Cash and cash equivalents at beginning of period 45.9 35.8 31.0 106.8 45.9 53.3 50.9 43.2 32.0 53.3 39.6 42.8 31.2 24.4 39.6

Cash and cash equivalents at end of period 35.8 31.0 106.8 53.3 53.3 50.9 43.2 32.0 39.6 39.6 42.8 31.2 24.4 46.0 46.0

Net increase/(decrease) in cash and cash equivalents (10.1) (4.8) 75.7 (53.5) 7.4 (2.4) (7.7) (11.2) 7.6 (13.7) 3.2 (11.6) (6.8) 21.6 6.4B/S beginning cash and cash equivalents 45.9 35.8 31.1 106.8 45.9 53.3 51.0 43.2 32.0 53.3 39.6 42.9 31.2 24.4 39.6

B/S ending cash and cash equivalents 35.8 31.1 106.8 53.3 53.3 51.0 43.2 32.0 39.6 39.6 42.9 31.2 24.4 46.0 46.0

B/S net change in cash (10.1) (4.8) 75.7 (53.5) 7.4 (2.4) (7.7) (11.2) 7.6 (13.7) 3.2 (11.6) (6.8) 21.6 6.4Check 0.0 (0.0) 0.0 0.0 0.0 (0.0) 0.0 (0.0) 0.0 0.0 0.0 (0.0) (0.0) 0.0 0.0

Cash Flow Ratios Q1'16 Q2'16 Q3'16 Q4'16E 2016E Q1'17E Q2'17E Q3'17E Q4'17E 2017E Q1'18E Q2'18E Q3'18E Q4'18E 2018EEBITDA 11.2 21 11.7 7.5 51.0 10.6 15.7 17.8 19.3 63.3 20.3 23.5 24.7 26.9 95.4

Consensus EBITDA 7.1 57.4 11.6 20.6 23.0 21.8 70.4 28.0 29.0 28.0 29.0 108.9

EBITDA margin 10.6% 5.9% 4.0% 6.7% 5.1% 7.3% 8.0% 8.3% 7.2% 8.3% 8.7% 8.7% 8.9% 8.6%

EBITDA margin -- YoY 4475.0% 69.5% 54.1% -61.7% 30.6% -5.5% -24.1% 52.2% 157.5% 24.1% 92.1% 49.9% 39.3% 39.3% 50.7%

CFO (1.1) 11.3 17.8 (17.8) 10.2 8.6 3.4 0.1 19.1 31.2 19.2 (0.4) 7.4 30.8 57.1

CFO margin 5.8% 8.9% -9.5% 1.4% 4.1% 1.6% 0.0% 8.2% 3.5% 7.8% -0.1% 2.6% 10.2% 5.2%

CFO margin -- YoY -237.0% 1624.4% 417.2% -164.0% -67.3% 860.2% -70.3% -99.6% 207.5% 204.9% 122.8% -110.5% 11344.1% 61.5% 83.4%

EBIT 8.2 17.5 8.1 2.8 36.6 5.7 10.5 12.3 13.6 41.9 14.3 17.0 18.1 19.9 69.3

Effective tax rate 56.9% 14.5% 9.9% 25.0% 29.6% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0%

EBIT, tax adjusted 3.5 15.0 7.3 2.1 25.7 4.2 7.8 9.2 10.2 31.5 10.8 12.8 13.5 14.9 52.0

Plus: Depreciation & amortization 3.0 3.2 3.5 4.7 14.4 4.9 5.2 5.5 5.7 21.3 6.0 6.4 6.7 7.0 26.1

Less: Change in working capital (7.1) (4.6) 1.4 (20.2) (30.4) 8.6 (7.6) (7.5) 5.3 (1.2) 4.6 (12.5) (10.7) 11.0 (7.5)

Less: Capex and other PPE (10.9) (3.4) (4.7) (35.7) (54.6) (11.0) (11.1) (11.3) (11.5) (44.8) (16.0) (11.3) (14.2) (9.3) (50.8)

FCFF (11.4) 10.2 7.6 (49.1) (44.9) 6.7 (5.6) (4.1) 9.7 6.7 5.3 (4.5) (4.7) 23.7 19.8Source: SEC filings and press releases; ROTH Capital Partners estimates.

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Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifiesthe following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal viewsabout the subject company or companies and its or their securities. I also certify that no part of my compensation was, isor will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Disclosures:

ROTH makes a market in shares of TPI Composites, Inc. and First Solar, Inc. and as such, buys and sells from customerson a principal basis.

Each box on the Rating and Price Target History chart above represents a date on which an analyst made a change to arating or price target, except for the first box, which may only represent the first note written during the past three years.Distribution Ratings/IB Services shows the number of companies in each rating category from which Roth or an affiliatereceived compensation for investment banking services in the past 12 month.

Distribution of IB Services Firmwide

IB Serv./Past 12 Mos.as of 01/17/17

Rating Count Percent Count Percent

Buy [B] 224 68.09 112 50.00Neutral [N] 54 16.41 24 44.44Sell [S] 5 1.52 3 60.00Under Review [UR] 44 13.37 32 72.73

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Our rating system attempts to incorporate industry, company and/or overall market risk and volatility. Consequently, at anygiven point in time, our investment rating on a stock and its implied price movement may not correspond to the stated 12-month price target.

Ratings System Definitions - ROTH employs a rating system based on the following:

Buy: A rating, which at the time it is instituted and or reiterated, that indicates an expectation of a total return of at least10% over the next 12 months.

Neutral: A rating, which at the time it is instituted and or reiterated, that indicates an expectation of a total return betweennegative 10% and 10% over the next 12 months.

Sell: A rating, which at the time it is instituted and or reiterated, that indicates an expectation that the price will depreciateby more than 10% over the next 12 months.

Under Review [UR]: A rating, which at the time it is instituted and or reiterated, indicates the temporary removal of theprior rating, price target and estimates for the security. Prior rating, price target and estimates should no longer be reliedupon for UR-rated securities.

Not Covered [NC]: ROTH does not publish research or have an opinion about this security.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other businessrelationships with the covered companies mentioned in this report in the next three months. The material, information andfacts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are fromsources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used asa complete analysis of the company, industry or security discussed in the report. Additional information is available uponrequest. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report aresubject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actualresults to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a highdegree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without theexpress written permission of ROTH. Copyright 2017. Member: FINRA/SIPC.

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