HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

Xinjiang Goldwind Science & Technology / Equity Bottom-Up

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<a href="https://www.smartkarma.com/entities/xinjiang-goldwind-science-technology-h" target="_blank" data-smartkarma-citation="entities:10112:1" rel="noopener">Xinjiang Goldwind Science &amp; Technology (2208 HK)</a> sees recent recovery in WTG price to be positive; and the increase in average unit size should be good to unit costs.</li>
<li>Gross margin contracted 3.1pp YoY in 1Q22 and it has put in place many cost reduction initiatives to contain cost inflation. It expects more impacts can be realised in 2H22.</li>
<li>External order backlog up 6.3% YoY to 16.97GW, with an encouraging 37.7% growth for overseas contracts. We think its 9.9x FY22F PER is inexpensive relative to the clean energy plays.</li>
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Xinjiang Goldwind Science &amp; Technology (2208 HK) sees recent recovery in WTG price to be positive; and the increase in average unit size should be good to unit costs.
Gross margin contracted 3.1pp YoY in 1Q22 and it has put in place many cost reduction initiatives to contain cost inflation. It expects more impacts can be realised in 2H22.
External order backlog up 6.3% YoY to 16.97GW, with an encouraging 37.7% growth for overseas contracts. We think its 9.9x FY22F PER is inexpensive relative to the clean energy plays.


Xinjiang Goldwind (2208 HK): Key Takeaways from 1Q22 Call

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<a href="https://www.smartkarma.com/entities/cimc-enric-holdings-ltd" target="_blank" data-smartkarma-citation="entities:47:1" rel="noopener">Cimc Enric Holdings (3899 HK)</a> has an encouraging 1Q22 with 24.9% revenue growth. If not the impact of the pandemic and lockdowns in Mar, growth would even reach 35.2%.</li>
<li>Total new orders increased 23.2% in the quarter even in a period disrupted by lockdowns. Backlog stands at Rmb15.5bn, enough to fully cover FY22 revenue with 7% growth.</li>
<li>Hydrogen energy business, though still small, witnessed 80.5% revenue growth. Good demand drives new orders to Rmb105.4m; and its backlog of Rmb180m equals to 5x of 1Q22 revenue. </li>
</ul>



Cimc Enric Holdings (3899 HK) has an encouraging 1Q22 with 24.9% revenue growth. If not the impact of the pandemic and lockdowns in Mar, growth would even reach 35.2%.
Total new orders increased 23.2% in the quarter even in a period disrupted by lockdowns. Backlog stands at Rmb15.5bn, enough to fully cover FY22 revenue with 7% growth.
Hydrogen energy business, though still small, witnessed 80.5% revenue growth. Good demand drives new orders to Rmb105.4m; and its backlog of Rmb180m equals to 5x of 1Q22 revenue. 


Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

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<li>We analyse the changes of A/H premium on 138 stocks over the last week.</li>
<li>Consumer staple, consumer discretionary and heathcare led the 3.0ppt weekly A-H premium decline. </li>
<li>We highlight names including Shenzhen HepaLink, Shandong Xinhua Pharm, and Shanghai Haohai Biological Technology.</li>
</ul>


We analyse the changes of A/H premium on 138 stocks over the last week.
Consumer staple, consumer discretionary and heathcare led the 3.0ppt weekly A-H premium decline. 
We highlight names including Shenzhen HepaLink, Shandong Xinhua Pharm, and Shanghai Haohai Biological Technology.


A-H Premium Weekly: Healthcare Led Premium Decline

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<li>We think the recent price weakness of <a href="https://www.smartkarma.com/entities/dongfang-electric-corporation-limited" target="_blank" data-smartkarma-citation="entities:1251:1" rel="noopener">Dongfang Electric (1072 HK)</a> is overdone, and there is strong value proposition on the stock based on its current multiples.</li>
<li>DEC's orderbook has well covered in the next two years, while we see cost management measures will help mitigating the pressure on margin. </li>
<li>It is well positioned to capture the wind power boom (26% of FY21 revenue) and remains the prime beneficiary of China's hydrogen economy and pumped storage demand in the longer-term.</li>
</ul>


We think the recent price weakness of Dongfang Electric (1072 HK) is overdone, and there is strong value proposition on the stock based on its current multiples.
DEC's orderbook has well covered in the next two years, while we see cost management measures will help mitigating the pressure on margin. 
It is well positioned to capture the wind power boom (26% of FY21 revenue) and remains the prime beneficiary of China's hydrogen economy and pumped storage demand in the longer-term.


Dongfang Electric (1072 HK): Beaten Down Too Excessively

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<a href="https://www.smartkarma.com/entities/cimc-enric-holdings-ltd" target="_blank" data-smartkarma-citation="entities:47:1" rel="noopener">Cimc Enric Holdings (3899 HK)</a> posted a set of encouraging result for FY21. It achieved a 37.4% YoY growth in 2H21 even after a 77.5% growth in 1H21. </li>
<li>Management suggests that gross margin will improve in this year as measures have been taken to cope with the factors that lead to the 2.3pp contraction in FY21.</li>
<li>Hydrogen energy is a bright spot - though contribution is still small, it expects to at least double its revenue in FY22, and remains bullish on the long term prospects.</li>
</ul>



Cimc Enric Holdings (3899 HK) posted a set of encouraging result for FY21. It achieved a 37.4% YoY growth in 2H21 even after a 77.5% growth in 1H21. 
Management suggests that gross margin will improve in this year as measures have been taken to cope with the factors that lead to the 2.3pp contraction in FY21.
Hydrogen energy is a bright spot - though contribution is still small, it expects to at least double its revenue in FY22, and remains bullish on the long term prospects.


CIMC Enric (3899 HK): Still Running on the Fast Lane

China

Dongfang Electric Corporation Limited manufactures and sells hydro and steam power generators and AC/DC electric motors. The Company also provides repair, upgrade, maintenance, and other services for the products.

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Dongfang Electric (1072 HK)

Xinjiang Goldwind (2208 HK): Key Takeaways from 1Q22 Call

Goldwind has cost management initiatives to counter margin contraction and its overseas backlog has witnessed good growth. Strategic disposal of...

Osbert Tang, CFA

CIMC Enric (3899 HK): A Favourable Start

CIMC Enric has a good 1Q22 revenue and new order growth; and should there be no disruption from the pandemic, they will even be higher. Hydrogen...

Osbert Tang, CFA

A-H Premium Weekly: Healthcare Led Premium Decline

A-H premium declined by 3.0ppt last week, led by consumer staple, consumer discretionary and heathcare. We highlight names including Shenzhen...

Ke Yan, CFA, FRM