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.

Shanghai International Airport (600009 CH): Reacceleration of Traffic Pace in Jul

Shanghai International Airport (600009 CH): Still the Preferred Play Despite Widened Losses in 2Q20

Chinese Airlines: China Southern the Clear Winner in 1H20 - A Must Read Comparison on the Big Three

Guangzhou Baiyun Intl Airport (600004 CH): First to Achieve Full Recovery in Domestic Market

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

Shanghai International Airport (600009 CH): Slight Softening in Momentum in Jun

Thematic (Sector/Industry)

China Airlines / Thematic (Sector/Industry)

<p>On the back of good summer demand, overall domestic passenger traffic for the Big Three Chinese airlines has recovered to 73% of the level in Jul 2019.  The domestic passenger performance for <a href="https://www.smartkarma.com/entities/china-eastern-airlines-co-h" target="_blank" data-smartkarma-citation="entities:1079:1" rel="noopener">China Eastern Airlines Co (H) (670 HK)</a> is marginally better than <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>, but in terms of overall load factor for 7M20, CSA stayed as the best at 59.7%, significantly ahead of 54.5% for CEA and 54.3% for Air China.</p><p>We prefer CSA to the other two, and expect it to post the best sequential improvement in profitability (or reduction in losses) in 2Q20 when they report 1H20 result on 28 Aug. Domestic traffic recovery will stay as the key driver for 3Q20, and we see positive momentum as reflected by a 26.2% increase in average fare for China's top 5 domestic route in 1-17 Aug when compared with the average in Jul.</p>

On the back of good summer demand, overall domestic passenger traffic for the Big Three Chinese airlines has recovered to 73% of the level in Jul 2019.  The domestic passenger performance for China Eastern Airlines Co (H) (670 HK) is marginally better than China Southern Airlines (1055 HK), but in terms of overall load factor for 7M20, CSA stayed as the best at 59.7%, significantly ahead of 54.5% for CEA and 54.3% for Air China.We prefer CSA to the other two, and expect it to post the best sequential improvement in profitability (or reduction in losses) in 2Q20 when they report 1H20 result on 28 Aug. Domestic traffic recovery will stay as the key driver for 3Q20, and we see positive momentum as reflected by a 26.2% increase in average fare for China's top 5 domestic route in 1-17 Aug when compared with the average in Jul.

Shanghai International Airport (600009 CH)

Beijing Capital International Airport (BCIA) (694 HK)

Beijing Capital International Airport (BCIA)

Guangzhou Baiyun International Airport (600004 CH)

Chinese Airlines: Jul Traffic Reflects Good Summer Strengths