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.

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Equity Bottom-Up

Canvest Environmental Protection Group / Equity Bottom-Up

Canvest Environmental Protection Group (1381 HK)

<p><a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener">Canvest Environmental Protection Group (1381 HK)</a> generated a resilient earnings performance of 12.7% YoY growth in 1H20, despite the negative impact of COVID-19 on its BOT construction revenue. We also like the good 3pp expansion in gross margin to 33.8% amid the tough operating environment, thanks to higher project utilisation and good cost control. </p><p>Over the next 12 months, Canvest will complete 9 new projects, driving a solid earnings stream. Moreover, based on outstanding pipeline, its operational waste-to-energy capacity will grow by a CAGR of 23% CAGR for 2019-2024. We consider its 7.6x 12-month forward P/E inexpensive relative to the historical range of 7.2-17.6x. While high gearing is a concern, the guidance of focusing on execution of existing projects suggests slower new project growth and this give us comfort that the balance sheet will not get too stretched further.</p>

Canvest Environmental Protection Group (1381 HK) generated a resilient earnings performance of 12.7% YoY growth in 1H20, despite the negative impact of COVID-19 on its BOT construction revenue. We also like the good 3pp expansion in gross margin to 33.8% amid the tough operating environment, thanks to higher project utilisation and good cost control. Over the next 12 months, Canvest will complete 9 new projects, driving a solid earnings stream. Moreover, based on outstanding pipeline, its operational waste-to-energy capacity will grow by a CAGR of 23% CAGR for 2019-2024. We consider its 7.6x 12-month forward P/E inexpensive relative to the historical range of 7.2-17.6x. While high gearing is a concern, the guidance of focusing on execution of existing projects suggests slower new project growth and this give us comfort that the balance sheet will not get too stretched further.

Zhejiang Weiming Environment Protection Co Ltd (603568 CH)

Zhejiang Weiming Environment Protection Co Ltd

Canvest Env (1381 HK): Positive Takeaways from Post-1H20 Result Investor Call