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.

A Look on Some Victims of Rmb Appreciation in FY20: How Will They Fare in FY21 if Rmb Stays Weak?

Worsening Risk Parameters for Asia-Pacific Region

Sinotrans (598 HK): Encouraging Industry Datapoints Bode Well for Outlook

Sinotrans (598 HK): Massive Beat in 3Q20 Profit

Equity Bottom-Up

We think the market should focus on the exciting positive profit alert for 1Q21 at <a href="https://www.smartkarma.com/entities/sinotrans-limited-h" target="_blank" data-smartkarma-citation="entities:1321:1" rel="noopener">Sinotrans (598 HK)</a>, instead of the headline result for FY20. The company's guidance of recurring earnings of Rmb761-797m in 1Q21 is very encouraging - this represents a 3.15x to 3.35x YoY increase, and more importantly, a 56-64% growth vs. 1Q19, suggesting that the momentum does not just come from a low base in last year.While it reported a 1.8% decline in FY20 profit, this is masked by non-recurring items. In fact, the recurring profit for 4Q20 surged an adorable 143.7% YoY, reflecting an impressive sequential improvement from 33.7% YoY growth in 3Q20. We still see its undervalued at 0.6x P/B and 5.9x PER for FY21, yet ROE is set to reach 10-10.5% in the next two years with basically no net debt on its book.

We think the market should focus on the exciting positive profit alert for 1Q21 at Sinotrans (598 HK), instead of the headline result for FY20. The company's guidance of recurring earnings of Rmb761-797m in 1Q21 is very encouraging - this represents a 3.15x to 3.35x YoY increase, and more importantly, a 56-64% growth vs. 1Q19, suggesting that the momentum does not just come from a low base in last year.While it reported a 1.8% decline in FY20 profit, this is masked by non-recurring items. In fact, the recurring profit for 4Q20 surged an adorable 143.7% YoY, reflecting an impressive sequential improvement from 33.7% YoY growth in 3Q20. We still see its undervalued at 0.6x P/B and 5.9x PER for FY21, yet ROE is set to reach 10-10.5% in the next two years with basically no net debt on its book.

Sinotrans (598 HK): Quick Take on the Good Underlying 4Q20 and Positive Profit Alert for 1Q21