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.

Three Stocks Look Attractive and Three to Avoid Amid the Sell-Off

Sinotrans (598 HK): From Strength to Strength

Sinotrans (598 HK): Good 1Q21, Outlook Stays Very Decent

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

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

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/sinotrans-limited-h" target="_blank" data-smartkarma-citation="entities:1321:1" rel="noopener">Sinotrans (598 HK)</a> issued a positive profit alert on 7 Jul which indicates its 1H21 recurring net profit will reach Rmb1.744-1.961bn. In other words, recurring profit growth will be between 60% and 80% YoY in the period. More importantly, looking at just 2Q21, the growth will range at 7.1%-31.1%, or 19.1% based on the midpoint of the guidance. In our view, this is a decent set of result which will be reported by end-Aug.</p><p>Share price of Sinotrans has retreated by 15% from its peak in early-Jun due to concerns on the slowdown in new export orders in China and high base for comparison going into 2H21. However, the retreat has returned valuations back to very undemanding levels of 6.2x PER, 0.61x P/B and 5.2% dividend yield for FY21. Even with a projected net cash of Rmb0.48/share (or HK$0.51, 16% of current share price), we still looking at a healthy ROE of 9.8% for the year.</p>

Sinotrans (598 HK) issued a positive profit alert on 7 Jul which indicates its 1H21 recurring net profit will reach Rmb1.744-1.961bn. In other words, recurring profit growth will be between 60% and 80% YoY in the period. More importantly, looking at just 2Q21, the growth will range at 7.1%-31.1%, or 19.1% based on the midpoint of the guidance. In our view, this is a decent set of result which will be reported by end-Aug.Share price of Sinotrans has retreated by 15% from its peak in early-Jun due to concerns on the slowdown in new export orders in China and high base for comparison going into 2H21. However, the retreat has returned valuations back to very undemanding levels of 6.2x PER, 0.61x P/B and 5.2% dividend yield for FY21. Even with a projected net cash of Rmb0.48/share (or HK$0.51, 16% of current share price), we still looking at a healthy ROE of 9.8% for the year.

Sinotrans (598 HK): Positive Profit Alert for 1H21