HK/China Equity Long-Short

Osbert Tang, CFA

Osbert Tang is an equity analyst with over 20 years of experience with focuses on China transport, infrastructure, industrials and utilities sectors. He has been based in Shanghai since 2003, accumulated nearly 20 years of on-ground knowledge on the Chinese economy and financial markets, and has a wealth of contacts with China corporates and government entities. 

Osbert has received votes from top-tier institutional investors and has been a highly-ranked transport and infrastructure analyst in the Asiamoney, Institutional Investors and Greenwich surveys. In addition to his extensive experience with international investment banks including RBS, ABN AMRO (both served as Shanghai Chief Representative), Paribas Asia Equity, Maybank Kim Eng and DBS Securities, he has been a senior analyst with Moody’s Investors Service with focus on ratings of China infrastructure and related LGFV issuers. He has also worked in the area of strategic development at Sun Hung Kai Properties Limited. 

Osbert holds a BBA from the Chinese University of Hong Kong, an MBA from the University of Texas at Austin and a MSSc in Applied Psychology from the City University of Hong Kong. He was accredited with the CFA charter in 1997, and is a member of both British Psychological Society and Hong Kong Psychological Society.

Beijing-Shanghai High Speed Railway (601816 CH): Poor 1Q20, Difficult to Justify High Multiples

Beijing-Shanghai High Speed Railway (601816 CH): Weaker 2Q20 QoQ Showed the Tough Environment

Beijing-Shanghai High Speed Railway (601816 CH): Good FY19 Result Means Nothing for FY20

Equity Bottom-Up

Beijing-Shanghai High Speed Ra / Equity Bottom-Up

Beijing-Shanghai High Speed Ra (601816 CH)

<p>The announcement by <a href="https://www.smartkarma.com/entities/beijing-shanghai-high-speed-railway-a" target="_blank" data-smartkarma-citation="entities:28433:1" rel="noopener">Beijing-Shanghai High Speed Railway (601816 CH)</a> to adjust its fare from a flat price to a floating range look apparently like a positive move, but we do not see any meaningful impact on its bottom line. The limited upside to the Second Class fare and the small number of Business Class seats suggested that the amount of benefits is immaterial. </p><p>We estimate that, in a normal year, a 1% change in average passenger yield will only lift its profit by an equal 1%. However, the current consensus earnings forecasts, particularly for FY21, are too optimistic due to challenges including slow traffic recovery, inflexible cost structure and more severe loss at Beijing-Fuzhou Railway Anhui Co., Ltd. At 22.7x consensus EPS for FY21, it is still expensive and we continue to see risk of re-testing levels close to its IPO price of Rmb4.88.</p>

The announcement by Beijing-Shanghai High Speed Railway (601816 CH) to adjust its fare from a flat price to a floating range look apparently like a positive move, but we do not see any meaningful impact on its bottom line. The limited upside to the Second Class fare and the small number of Business Class seats suggested that the amount of benefits is immaterial. We estimate that, in a normal year, a 1% change in average passenger yield will only lift its profit by an equal 1%. However, the current consensus earnings forecasts, particularly for FY21, are too optimistic due to challenges including slow traffic recovery, inflexible cost structure and more severe loss at Beijing-Fuzhou Railway Anhui Co., Ltd. At 22.7x consensus EPS for FY21, it is still expensive and we continue to see risk of re-testing levels close to its IPO price of Rmb4.88.

Beijing-Shanghai High Speed Railway (601816 CH): Adjustment in Fare Price Not of Much Help