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 Infrastructure REITs: Excellent First Batch Result - Good for Zhejiang Expressway (576 HK)

Zhejiang Expressway (576 HK): Drivers in Place for Robust Outlook

Zhejiang Expressway (576 HK): Is There Any Room for Higher Dividend Payout?

Zhejiang Expressway (576 HK): Gaining from Both Growth and Stable Business Exposures

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

Zhejiang Expressway Co H / Equity Bottom-Up

<p>Recovery of toll road business, sustained operating momentum of securities division and its first-mover issuance of public infrastructure REIT are the key catalysts for the share price of <a href="https://www.smartkarma.com/entities/zhejiang-expressway-co-h" target="_blank" data-smartkarma-citation="entities:2178:1" rel="noopener">Zhejiang Expressway Co H (576 HK)</a> (ZJEC). Its existing operations have already seen a powerful turnaround in 1Q21 - net profit reached Rmb1.2bn, against losses of Rmb11m a year ago, with most of the strength driven by the toll road segment while profit from <a href="https://www.smartkarma.com/entities/zheshang-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:29981:1" rel="noopener">Zheshang Securities Co Ltd (601878 CH)</a> was up 32.9%. </p><p>ZJEC has its Hanghui Expressway as the underlying asset in the pioneer public infrastructure REIT issuance currently reviewed by the Shanghai Stock Exchange. To the earliest, the dedicated public investment fund investing in the REIT can be listed in mid-Jun, bringing in a HK$0.45 enhancement to its book value as Hanghui is revalued. This should add to the undemanding 5.4x PER, 0.95x P/B and attractive 9% dividend yield for FY21F as key attractions of the stock.  </p>

Recovery of toll road business, sustained operating momentum of securities division and its first-mover issuance of public infrastructure REIT are the key catalysts for the share price of Zhejiang Expressway Co H (576 HK) (ZJEC). Its existing operations have already seen a powerful turnaround in 1Q21 - net profit reached Rmb1.2bn, against losses of Rmb11m a year ago, with most of the strength driven by the toll road segment while profit from Zheshang Securities Co Ltd (601878 CH) was up 32.9%. ZJEC has its Hanghui Expressway as the underlying asset in the pioneer public infrastructure REIT issuance currently reviewed by the Shanghai Stock Exchange. To the earliest, the dedicated public investment fund investing in the REIT can be listed in mid-Jun, bringing in a HK$0.45 enhancement to its book value as Hanghui is revalued. This should add to the undemanding 5.4x PER, 0.95x P/B and attractive 9% dividend yield for FY21F as key attractions of the stock.  

Zhejiang Expressway (576 HK): Reversion to Growth and Kick-Off of REIT Are Clear Positives