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.

China Transportation: In-Depth Look into April Export Figures and Readthrough to Sea and Air Freight

Sinotrans (0598 HK): China Merchants Group to Increase Stake - A Target for Privatisation?

Sinotrans Limited (598 HK) : Acquisition Spree Expands Global and Domestic Networks

Sinotrans Limited (598 HK): Is the Market Too Bearish?

Sinotrans (598 HK): Favorable Risk-Return Payoff

Sinotrans Limited (598 HK): A Remarkable First Half Despite Trade War Headwinds

Equity Bottom-Up

<p>The 58.4% drop in profit at <a href="https://www.smartkarma.com/entities/sinotrans-limited-h" target="_blank" data-smartkarma-citation="entities:1321:1" rel="noopener">Sinotrans Limited H (598 HK)</a> in 1Q20 is in line with its guidance and we believe investors should look beyond such weak figures. The depressed share price should have well reflected the poor result and we expect its business volume to trough within 2Q20.</p><p>We upgrade our profit forecast to a 42% YoY drop in FY20F (from 54% previously) and still see favorable risk-return payoff. Its 0.43x P/B multiple is 1SD below average since 2003 and 2SD below average since 2014 - this looks to be too low for a company with an ROE of 5.5% in FY20F and minimal net debt, in our view.</p>

The 58.4% drop in profit at Sinotrans Limited H (598 HK) in 1Q20 is in line with its guidance and we believe investors should look beyond such weak figures. The depressed share price should have well reflected the poor result and we expect its business volume to trough within 2Q20.We upgrade our profit forecast to a 42% YoY drop in FY20F (from 54% previously) and still see favorable risk-return payoff. Its 0.43x P/B multiple is 1SD below average since 2003 and 2SD below average since 2014 - this looks to be too low for a company with an ROE of 5.5% in FY20F and minimal net debt, in our view.

Sinotrans (0598 HK): 1Q20 in Line, Still See Positive Risk-Return Payoff at Historical Low Valuation