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.

Xinhua Winshare (811 HK): Manageable Impact in 1Q20 and Good Recovery on Track

Xinhua Winshare (811 HK): Revisiting a Solid Yield Play Fully Backed by Net Cash

Xinhua Winshare (811 HK): We Love the Boredom

Xinhua Winshare (811 HK): Secured 6.2% Yield Rock Solid in the Waves

Xinhua Winshare (811 HK): On Track to Sustain Stable & Secured Yield

Xinhua Winshare (811HK): 3Q19 Is Another Decent Quarter

Equity Bottom-Up

<p>Including dividends, <a href="https://www.smartkarma.com/entities/xinhua-winshare-publishing-media-co-ltd" target="_blank" data-smartkarma-citation="entities:15072:1" rel="noopener">Xinhua Winshare (811 HK)</a> has outperformed the HSI by 16pp since 2019. Its FY19 result is resilient and more importantly, it sustains its cash generation. We expect this trend will continue, with net cash amounting to HK$3.60/share by end-FY20F, or 68% of its share price. Together with HK$2.30/share of liquid investments, they will more than cover 100% of the current share price of HK$5.28.</p><p>XW's steady textbook and supplementary material distribution business has not seen any impact from the outbreak, and only that retailing business (7% of FY20F gross profit) has been affected. We expect XW to raise its DPS over the next two years to reach its minimum payout ratio undertaking of 30%, putting it on secured dividend yield of 6.3% in FY21F. Its controlling shareholder has announced the plan to add 0.5-2% stakes in XW through buying the H-shares over the next 12 months - an added positive to XW's share price.  </p>

Including dividends, Xinhua Winshare (811 HK) has outperformed the HSI by 16pp since 2019. Its FY19 result is resilient and more importantly, it sustains its cash generation. We expect this trend will continue, with net cash amounting to HK$3.60/share by end-FY20F, or 68% of its share price. Together with HK$2.30/share of liquid investments, they will more than cover 100% of the current share price of HK$5.28.XW's steady textbook and supplementary material distribution business has not seen any impact from the outbreak, and only that retailing business (7% of FY20F gross profit) has been affected. We expect XW to raise its DPS over the next two years to reach its minimum payout ratio undertaking of 30%, putting it on secured dividend yield of 6.3% in FY21F. Its controlling shareholder has announced the plan to add 0.5-2% stakes in XW through buying the H-shares over the next 12 months - an added positive to XW's share price.  

Xinhua Winshare (811 HK): We like the Net Cash Cushion - 68% of Share Price