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.

China Southern Airlines (1055 HK): Mixed Reform at Airfreight Logistics Is A Value Added Move

Chinese Airlines: Big Three Aug Passenger Traffic up 18% MoM

Shanghai International Airport (600009 CH): Best in Domestic and Cargo Traffic in Aug

Chinese Airlines: Pair Trade - Long China Southern (1055 HK), Short Air China (753 HK)

China Southern Airlines (1055 HK): Most Benefited from Government Supportive Measures

Chinese Airlines: China Southern's Got the Best Traffic Performance in 1H20

Chinese Airlines and Airports: Huge Benefit from Resumption of Cross-Province Group Tourism

Chinese Airlines and Airports: Industry Loss Narrowed 10.1% QoQ in 2Q20 as Traffic Resumed

Equity Bottom-Up

China Southern Airlines / Equity Bottom-Up

<p>With overseas travel being virtually impossible this summer, China visitors have turned to domestic travel, and this has benefited <a href="https://www.smartkarma.com/entities/china-southern-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1078:1" rel="noopener">China Southern Airlines (1055 HK)</a> most significantly. In Jul, the average one-way fare for the top 5 domestic routes in China operated by CSA has increased by 11.3% MoM. But, the monthly average figure has underestimated the momentum of summer fare recovery - the average fare for 31-Jul is 80.7% higher than that for 30-Jun, as fare has maintained a continued uptrend since end-Jun. </p><p>The recent COVID-19 cases in Urumqi and Dalian are not expected to have a material impact on domestic air traffic, in our view, as collectively these two airports only account for 3.3% of China's air passenger throughput. Moreover, CSA's launch of Rmb3,699 all-you-can-fly package was well received, and was sold out in just two days. The stock's current 0.73x P/B is inexpensive (-1 SD below average) as we are of the view that the worst is behind us.  </p>

With overseas travel being virtually impossible this summer, China visitors have turned to domestic travel, and this has benefited China Southern Airlines (1055 HK) most significantly. In Jul, the average one-way fare for the top 5 domestic routes in China operated by CSA has increased by 11.3% MoM. But, the monthly average figure has underestimated the momentum of summer fare recovery - the average fare for 31-Jul is 80.7% higher than that for 30-Jun, as fare has maintained a continued uptrend since end-Jun. The recent COVID-19 cases in Urumqi and Dalian are not expected to have a material impact on domestic air traffic, in our view, as collectively these two airports only account for 3.3% of China's air passenger throughput. Moreover, CSA's launch of Rmb3,699 all-you-can-fly package was well received, and was sold out in just two days. The stock's current 0.73x P/B is inexpensive (-1 SD below average) as we are of the view that the worst is behind us.  

Shanghai International Airport (600009 CH)

Beijing Capital International Airport (BCIA) (694 HK)

Beijing Capital International Airport (BCIA)

Guangzhou Baiyun International Airport (600004 CH)

China Southern Airlines (1055 HK): Better Summer Yields Have Kicked In