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.

SITC International (1308 HK): All Priced In

Rmb Depreciation: An Angle for the Shipping Names?

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): Good Result Priced In, Challenges from Higher Costs

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> has a very spectacular 1H21, achieving a 309.4% YoY growth in net profit, even better than the high-end of the range indicated in the positive profit alert. The strength is driven by improvements in both volume (+29.4%) and freight rate (+42.3%), which supported a 6.9pp increase in dividend payout ratio to 70.6%. It is now yielding 7.8% for FY21F.</p><p>While the result is good and management continued to be positive towards the volume and rate outlook, we think that the market seems to have well-factored in such expectations. In fact, we expect earnings to peak in FY21, with ROE to average at 45% for FY22-23. While this is still very decent return levels, its 12-month forward P/B of 6.3x looks to leave limited further upside. Meanwhile, we see risks that the market has overlooked the negative swing factors. </p>

SITC International (1308 HK) has a very spectacular 1H21, achieving a 309.4% YoY growth in net profit, even better than the high-end of the range indicated in the positive profit alert. The strength is driven by improvements in both volume (+29.4%) and freight rate (+42.3%), which supported a 6.9pp increase in dividend payout ratio to 70.6%. It is now yielding 7.8% for FY21F.While the result is good and management continued to be positive towards the volume and rate outlook, we think that the market seems to have well-factored in such expectations. In fact, we expect earnings to peak in FY21, with ROE to average at 45% for FY22-23. While this is still very decent return levels, its 12-month forward P/B of 6.3x looks to leave limited further upside. Meanwhile, we see risks that the market has overlooked the negative swing factors. 

SITC International (1308 HK): Takeaways from Call, and We Are Cautious on the Downside Risk