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.

CR Gas (1193 HK): Sharp Contraction in 1H20 Profit Is Disappointing

China Gas Holdings (384 HK): Slower 1H Growth but Positive Guidance from Post-Result Call

ENN Energy (2688 HK): Well Justifies the Premium; and Management Guides for a Better FY21

ENN Ecological (600803 CH): Weak 1Q20 but Metamorphosis in Good Progress

China Infrastructure Deep Dive: Gas Utilities H & A Shares

Kunlun Energy (135 HK): Solid Growth in Downstream Gas Sales Is the Driver

Equity Bottom-Up

<p>We take <a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a>'s 13.8% YoY growth in core earnings in 1H20 positively, especially amid the tough operating environment facing the industry. While gas sales profit has slowed, this was partly offset by higher contribution from integrated energy. We are also delighted to see a 5.2% expansion in gas sales dollar margin and a 1.9pp expansion in overall gross margin. </p><p>Management revealed good gas sales recovery momentum in the last three months and guided for full-year core earnings growth of 15% but we believe this is likely conservative. In 2H20, further contribution from integrated energy, lower input costs, recovery in gas consumption and execution of new projects are the major drivers for ENN. Also, we are comfortable with its financial position, with 40% gearing in 1H20. ENN stays as our top pick in the China gas utilities sector, despite its sharp outperformance against peers YTD.  </p>

We take ENN Energy (2688 HK)'s 13.8% YoY growth in core earnings in 1H20 positively, especially amid the tough operating environment facing the industry. While gas sales profit has slowed, this was partly offset by higher contribution from integrated energy. We are also delighted to see a 5.2% expansion in gas sales dollar margin and a 1.9pp expansion in overall gross margin. Management revealed good gas sales recovery momentum in the last three months and guided for full-year core earnings growth of 15% but we believe this is likely conservative. In 2H20, further contribution from integrated energy, lower input costs, recovery in gas consumption and execution of new projects are the major drivers for ENN. Also, we are comfortable with its financial position, with 40% gearing in 1H20. ENN stays as our top pick in the China gas utilities sector, despite its sharp outperformance against peers YTD.  

ENN Energy (2688 HK): Key Takeaways from Post-1H20 Result Call - Still Best Placed in the Sector