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.

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

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

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

Equity Bottom-Up

<p>While <a href="https://www.smartkarma.com/entities/shenzhen-investment-ltd" target="_blank" data-smartkarma-citation="entities:17281:1" rel="noopener">Shenzhen Investment (604 HK)</a> has a positive outlook based on its good margin, low leverage, asset injection and good pre-sale performance, as revealed in its online investor meeting last Friday. Its Sep and Oct contracted sales momentum has gathered strength with over 50% YoY growth. Despite so, we see it less attractive than <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> in terms of investment merits. </p><p>In our view, the key concerns on SZ Inv are its diversification out of Greater Bay Area, shrinking land bank, risk of investment in Hengda Real Estate and the limited upside on Shenzhen property price. Share price of SZ Inv has underperformed that for SZ Int by 3.1pp and we continue to advocate a <a href="https://www.smartkarma.com/insights/the-shenzhen-story-a-look-at-the-pair-trades-on-sz-int-sz-exp-and-sz-inv" target="_blank" data-smartkarma-citation="insights:44508" rel="noopener">"long SZ Int, short SZ Inv"</a> pair trade strategy. </p>

While Shenzhen Investment (604 HK) has a positive outlook based on its good margin, low leverage, asset injection and good pre-sale performance, as revealed in its online investor meeting last Friday. Its Sep and Oct contracted sales momentum has gathered strength with over 50% YoY growth. Despite so, we see it less attractive than Shenzhen Intl (152 HK) in terms of investment merits. In our view, the key concerns on SZ Inv are its diversification out of Greater Bay Area, shrinking land bank, risk of investment in Hengda Real Estate and the limited upside on Shenzhen property price. Share price of SZ Inv has underperformed that for SZ Int by 3.1pp and we continue to advocate a "long SZ Int, short SZ Inv" pair trade strategy. 

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