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.

Shanghai International Airport (600009 CH): Extending Traffic Outperformance to Oct

China Southern Airlines (1055 HK): Domestic Strength Stays on Course

Guangzhou Baiyun Intl Airport (600004 CH): No Abatement in Growth Paces

Shanghai International Airport (600009 CH): Best Momentum Against Peers in Sep

Shanghai International Airport (600009 CH): Best in Domestic and Cargo Traffic in Aug

Shanghai International Airport (600009 CH): Still the Preferred Play Despite Widened Losses in 2Q20

Chinese Airlines: Big Three Aug Passenger Traffic up 18% MoM

Equity Bottom-Up

Shanghai International Airport / Equity Bottom-Up

Shanghai International Airport (600009 CH)

<p><a href="https://www.smartkarma.com/entities/shanghai-international-airport-co-ltd" target="_blank" data-smartkarma-citation="entities:6511:1" rel="noopener">Shanghai International Airport (600009 CH)</a> logged a loss of Rmb352m in 3Q20, representing a 24.6% QoQ loss narrowing. In absolute terms, it is worse than <a href="https://www.smartkarma.com/entities/guangzhou-baiyun-international-airport" target="_blank" data-smartkarma-citation="entities:10819:1" rel="noopener">Guangzhou Baiyun International Airport (600004 CH)</a> (loss of Rmb131m) and <a href="https://www.smartkarma.com/entities/beijing-capital-international-airport-bcia" target="_blank" data-smartkarma-citation="entities:10626:1" rel="noopener">Beijing Capital International Airport (BCIA) (694 HK)</a> (loss of Rmb347m). However, we still prefer SIAC given its exposure to the gradual recovery in international traffic, growth in freight volume, limited amount of capex and less risk of traffic competition/diversion.</p><p>For GBIA and BCIA, we think that the better 3Q20 results cannot cover the serious structural concerns they are facing. GBIA have worries including competition from other airports, the potential construction of a new airport at the Guangzhou vicinity and the likely rise in capex due to capacity expansion.  Meanwhile, traffic diversion to Beijing Daxing International Airport is still the medium term issue to cap BCIA's pace of recovery.</p>

Shanghai International Airport (600009 CH) logged a loss of Rmb352m in 3Q20, representing a 24.6% QoQ loss narrowing. In absolute terms, it is worse than Guangzhou Baiyun International Airport (600004 CH) (loss of Rmb131m) and Beijing Capital International Airport (BCIA) (694 HK) (loss of Rmb347m). However, we still prefer SIAC given its exposure to the gradual recovery in international traffic, growth in freight volume, limited amount of capex and less risk of traffic competition/diversion.For GBIA and BCIA, we think that the better 3Q20 results cannot cover the serious structural concerns they are facing. GBIA have worries including competition from other airports, the potential construction of a new airport at the Guangzhou vicinity and the likely rise in capex due to capacity expansion.  Meanwhile, traffic diversion to Beijing Daxing International Airport is still the medium term issue to cap BCIA's pace of recovery.

Beijing Capital International Airport (BCIA) (694 HK)

Beijing Capital International Airport (BCIA)

Guangzhou Baiyun International Airport (600004 CH)

Shanghai International Airport (600009 CH): Narrowing Loss in 3Q20