China: Xinjiang Goldwind Science & Technology H, Autobio Diagnostics Co Ltd, Sinotrans, Seazen (Formerly Future Land) and more

• Xinjiang Goldwind Science & 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.

• The quit of the centralized procurement of chemiluminescence products in Anhui directly put Autobio Diagnostics (603658 CH) in a passive position. The implications could be deeper and more complex than expected.
• Autobio didn’t seize COVID-19 testing opportunities, leading to the doubts about the Company’s market sensitivity and team execution, thus losing the opportunity to generate substantial cash flow for future acquisitions.
• Together with weak internationalization business, Autobio’s future performance growth could be uncertain and may not be able to support the rapid valuation expansion as expected.

• Sinotrans (598 HK) posted a 17.7% YoY net profit growth for 1Q22, providing evidences that it can weather the slowing trade momentum. More encouragingly, net profit surged 54.9% QoQ.
• Gross margin expanded 1.3pp YoY, signaling better cost performance. DHL-Sinotrans continued to provide very promising contribution, reflecting in a 14.3% growth in investment income. 
• Operation parameters are solid and gearing stays healthy (7.6%), providing room for higher dividend payout. Even at last year’s payout, it trade on 10.9% yield; and it’s on 3.3x PER.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.