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.

Chuangxin Industries: Buy – Attractive Cost Positioning and Medium-Term Growth Visibility

Equity Bottom-Up

<ul>
<li>Despite an overwhelming response and a 26-30% surge in the grey market, at 8.3x FY26 PER,  <a href="https://www.smartkarma.com/entities/chuangxin-industries" target="_blank" data-smartkarma-citation="entities:45636:1" rel="noopener">Chuangxin Industries (2788 HK)</a>'s IPO price does not generate much excitement for us. </li>
<li>Heavy reliance on connected transactions with the controlling shareholder, pressure on margins in the future, and a highly leveraged balance sheet are concerns. </li>
<li>We do not think it justifies trading at a premium to peers, hence, limited upside from now. The small free float, however, will increase the share price volatility.</li>
</ul>


Despite an overwhelming response and a 26-30% surge in the grey market, at 8.3x FY26 PER,  Chuangxin Industries (2788 HK)'s IPO price does not generate much excitement for us. 
Heavy reliance on connected transactions with the controlling shareholder, pressure on margins in the future, and a highly leveraged balance sheet are concerns. 
We do not think it justifies trading at a premium to peers, hence, limited upside from now. The small free float, however, will increase the share price volatility.


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Chuangxin Industries (2788 HK): It Doesn't Pay to Be Aggressive