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 Longyuan (916 HK): Good Apr Generation and Implications of China Three Gorges Renewables IPO

China Three Gorges Renewables (600905 CH) A-Share IPO: Kick-Start of IPO and Post-Roadshow Updates

China Longyuan (916 HK): Three Recent Positive Developments

China Three Gorges Renewables A-Share Pre-IPO: Initial Thoughts

China New and Clean Energy: A-Share IPO Pipeline Gathering Pace

China Yangtze Power (600900 CH): Well Positioned to Capture China's Clean Energy Initiative

China Yangtze Power (600900 CH): Pre-GDR Initial Thoughts

Equity Capital Markets

China Three Gorges Renewables / Equity Capital Markets

China Three Gorges Renewables (600905 CH)

<p><a href="https://www.smartkarma.com/entities/china-three-gorges-renewables" target="_blank" data-smartkarma-citation="entities:28950:1" rel="noopener">China Three Gorges Renewables (600905 CH)</a> (CTGR) has just published on 7-May its initial IPO price of Rmb2.65, aiming to raise net proceeds of Rmb22.5bn, giving it a gigantic market cap of Rmb75.7bn. The IPO is expected to take place by end-May with trading commences in early-Jun. After posting a 26.4% YoY net profit growth for FY20, its 1Q21 net profit will still increase by 15.1-24.6% based on its guidance. In our view, this indicated sustained quality earnings stream at CTGR. </p><p>Our earnings projections suggested that CTGR will achieve a 3-year earnings growth of 22%, putting the IPO price at 13.6x (weighted average) and 15.5x (fully-diluted) for FY21. Relative to an average of 20.4x for its A-share peers, such multiples are undemanding. Moreover, its huge market cap should attract good institutional interests, as it will be the largest renewable (ex-hydro) play in China. For our views on the key positives and negatives on CTGR, please refer to <a href="https://www.smartkarma.com/insights/china-three-gorges-renewables-a-share-pre-ipo-initial-thoughts" target="_blank" data-smartkarma-citation="insights:38547" rel="noopener">China Three Gorges Renewables A-Share Pre-IPO: Initial Thoughts</a>. </p>

China Three Gorges Renewables (600905 CH) (CTGR) has just published on 7-May its initial IPO price of Rmb2.65, aiming to raise net proceeds of Rmb22.5bn, giving it a gigantic market cap of Rmb75.7bn. The IPO is expected to take place by end-May with trading commences in early-Jun. After posting a 26.4% YoY net profit growth for FY20, its 1Q21 net profit will still increase by 15.1-24.6% based on its guidance. In our view, this indicated sustained quality earnings stream at CTGR. Our earnings projections suggested that CTGR will achieve a 3-year earnings growth of 22%, putting the IPO price at 13.6x (weighted average) and 15.5x (fully-diluted) for FY21. Relative to an average of 20.4x for its A-share peers, such multiples are undemanding. Moreover, its huge market cap should attract good institutional interests, as it will be the largest renewable (ex-hydro) play in China. For our views on the key positives and negatives on CTGR, please refer to China Three Gorges Renewables A-Share Pre-IPO: Initial Thoughts. 

China Datang Corp Renewable Power (1798 HK)

China Three Gorges Renewables (600905 CH) A-Share IPO: Set for Late-May and Thoughts on Valuations