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.

Shenzhen Intl (152 HK): Shenzhen Airlines Returned to Profit in 3Q20

The Shenzhen Story: A Look at the Pair Trades on SZ Int, SZ Exp and SZ Inv

Shenzhen Investment (604 HK): Good Story yet Less Attractive than Shenzhen International (152.HK)

China Infrastructure REITs: First Look on H-Share Toll Road Sector

China Real Estate: China Might Finally Be Getting Its Own REITs

Equity Bottom-Up

Shenzhen International / Equity Bottom-Up

<p>We find <a href="https://www.smartkarma.com/entities/shenzhen-intl-holdings" target="_blank" data-smartkarma-citation="entities:9:1" rel="noopener">Shenzhen Intl (152 HK)</a> (SZIH) an interesting, yet inexpensive, play on the encouraging outlook of both Shenzhen city and the Greater Bay Area. At the current depressed valuation of just 0.87x P/B, it is off significantly from the peak P/B of 1.2x in early this year. We see this penalty unjustifiable, as its two core assets - <a href="https://www.smartkarma.com/entities/shenzhen-expressway-co-h" target="_blank" data-smartkarma-citation="entities:2875:1" rel="noopener">Shenzhen Expressway Co H (548 HK)</a> (SZEX) and Shenzhen Airlines - will see good recovery in bottom line in 2H20. The announcement of their 3Q20 results are likely positive catalysts, as SZIH itself does not report quarterly result.</p><p>Longer term, SZIH is a beneficiary of infrastructure REIT program given its HK$15.8bn worth of logistics assets, and this business will also benefit from the e-commerce boom. Moreover, as the controlling shareholder of SZEX, SZIH will accrue the benefits from SZEX's potential securitisation of toll road and environmental treatment assets. In our view, SZIH is a rare species that currently overlooked by the market. </p>

We find Shenzhen Intl (152 HK) (SZIH) an interesting, yet inexpensive, play on the encouraging outlook of both Shenzhen city and the Greater Bay Area. At the current depressed valuation of just 0.87x P/B, it is off significantly from the peak P/B of 1.2x in early this year. We see this penalty unjustifiable, as its two core assets - Shenzhen Expressway Co H (548 HK) (SZEX) and Shenzhen Airlines - will see good recovery in bottom line in 2H20. The announcement of their 3Q20 results are likely positive catalysts, as SZIH itself does not report quarterly result.Longer term, SZIH is a beneficiary of infrastructure REIT program given its HK$15.8bn worth of logistics assets, and this business will also benefit from the e-commerce boom. Moreover, as the controlling shareholder of SZEX, SZIH will accrue the benefits from SZEX's potential securitisation of toll road and environmental treatment assets. In our view, SZIH is a rare species that currently overlooked by the market. 

Shenzhen Intl (152 HK): A Gem in the Greater Bay Area