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 Transportation: Strong Aug Export to Benefit Sinotrans (598 HK) And SITC Intl (1308 HK)

SITC International (1308 HK): Impressive 3Q20 to Support a Record Year in FY20

SITC International (1308 HK): Well, a Very Quality Company but Too Much Too Fast

SITC International (1308 HK): Creator of Shareholder Value

SITC International (1308 HK): Spectacular Show in FY19, Fundamentals Stay Solid

SITC International (1308 HK): 1Q20 Showed Exceptional Resilience

SITC International (1308 HK): Latest Update Post COVID-19 Outbreak

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/sitc-international-holdings" target="_blank" data-smartkarma-citation="entities:15301:1" rel="noopener">SITC International (1308 HK)</a> continued to deliver a set of impressive result for 1H20 despite the negative impact of COVID-19. Net profit grew 9.9%, though both volume and average freight rate are down YoY. This is primarily driven by cost discipline and lower bunker price. Annualised ROE reached 23.3%, with gearing of just 9.3%. Moreover, DPS rose 23.5% YoY on increased payout ratio, reflecting management's confidence on the outlook and comfortable overall financial position.</p><p>We continue to see positive outlook given its pure Asia exposure. In the result call, management guided for good volume recovery and moderation of freight rate decline in 2H20. At 3x P/B and 13.7x PER, its valuations are not cheap, hence we do not expect further significant share price rally in the near term. However, given the solid profit outlook, excellent management, high ROE (FY20F: 23.5%) and healthy financial position, we do not see any negative share price catalyst in the near term. SITC is a long-term quality play that delivers a steadily increasing profit stream; any share price weakness is just opportunity to add to the position, in our view. </p>

SITC International (1308 HK) continued to deliver a set of impressive result for 1H20 despite the negative impact of COVID-19. Net profit grew 9.9%, though both volume and average freight rate are down YoY. This is primarily driven by cost discipline and lower bunker price. Annualised ROE reached 23.3%, with gearing of just 9.3%. Moreover, DPS rose 23.5% YoY on increased payout ratio, reflecting management's confidence on the outlook and comfortable overall financial position.We continue to see positive outlook given its pure Asia exposure. In the result call, management guided for good volume recovery and moderation of freight rate decline in 2H20. At 3x P/B and 13.7x PER, its valuations are not cheap, hence we do not expect further significant share price rally in the near term. However, given the solid profit outlook, excellent management, high ROE (FY20F: 23.5%) and healthy financial position, we do not see any negative share price catalyst in the near term. SITC is a long-term quality play that delivers a steadily increasing profit stream; any share price weakness is just opportunity to add to the position, in our view. 

SITC International (1308 HK): 1H20 - Continuing the Excellent Trajectory