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

China Everbright Water / Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/china-everbright-water-limited" target="_blank" data-smartkarma-citation="entities:31446:1" rel="noopener">China Everbright Water (1857 HK)</a> (CEW) posted impressive 35.5% rise in 1H21 net profit to HK$548m, driven by strengths across all revenue sources. Besides good increase in construction revenue as more projects are under construction, the 42.4% surge in revenue from operation is a very positive trend. A 4.5pp higher dividend payout ratio YoY suggested that management is confident on 2H21 outlook. </p><p>CEW has an excellent pipeline of new waste water treatment projects, with 26 of them currently under construction and this should underpin medium-term growth. Moreover, tariff hike will be an added driver for 2H21 bottom line. In our view, there is still huge room to growth through M&amp;As and upgrade of existing projects. At just 0.4x P/B and 3.7x PER for FY21, CEW's valuations have well reflected the concerns of weak cash flow and tight financial position and we believe the current multiples have grossly undervalued the stock.</p>

China Everbright Water (1857 HK) (CEW) posted impressive 35.5% rise in 1H21 net profit to HK$548m, driven by strengths across all revenue sources. Besides good increase in construction revenue as more projects are under construction, the 42.4% surge in revenue from operation is a very positive trend. A 4.5pp higher dividend payout ratio YoY suggested that management is confident on 2H21 outlook. CEW has an excellent pipeline of new waste water treatment projects, with 26 of them currently under construction and this should underpin medium-term growth. Moreover, tariff hike will be an added driver for 2H21 bottom line. In our view, there is still huge room to growth through M&amp;As and upgrade of existing projects. At just 0.4x P/B and 3.7x PER for FY21, CEW's valuations have well reflected the concerns of weak cash flow and tight financial position and we believe the current multiples have grossly undervalued the stock.

China Everbright Water (1857 HK): Post 1H21 Call - Strengths Will Sustain