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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CPMC Holdings (906 HK): Catch-Up with Company Indicates Cost Pressure Manageable

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/cpmc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10427:1" rel="noopener">CPMC Holdings (906 HK)</a> looks to have kept its input cost managed and alleviated such pressure through hedging of raw material costs and raising product prices. The recent retreat in commodity prices upon the government's efforts to keep them under control also partly mitigates the pressure. Interestingly, the company sees influx of orders previously placed with smaller competitors as they are badly affected by elevated cost and power storage.</p><p>The company revealed that its production has not experienced material interruption during power shortage as its plants are highly-graded by local governments. It continued to expect a stable margin for FY21 despite all disruptive factors in 2H21. At 7.8x PER and 0.65x P/B for FY22F, we think that CPMC is appealing after a 26% retreat in share price from the peak. Its ROE of 9.7% for FY22F is also a historically high level. </p>

CPMC Holdings (906 HK) looks to have kept its input cost managed and alleviated such pressure through hedging of raw material costs and raising product prices. The recent retreat in commodity prices upon the government's efforts to keep them under control also partly mitigates the pressure. Interestingly, the company sees influx of orders previously placed with smaller competitors as they are badly affected by elevated cost and power storage.The company revealed that its production has not experienced material interruption during power shortage as its plants are highly-graded by local governments. It continued to expect a stable margin for FY21 despite all disruptive factors in 2H21. At 7.8x PER and 0.65x P/B for FY22F, we think that CPMC is appealing after a 26% retreat in share price from the peak. Its ROE of 9.7% for FY22F is also a historically high level. 

CPMC (906 HK): Cost Pressure Appears Controlled While Demand Looks Firm