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.

Our Three Best Trades in 2020! and How Will We Position for 2021?

China Construction Machinery: Good to the Last Drop

Lonking (3339 HK): Company Suggests Robust Outlook for 2021

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

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

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

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

Equity Bottom-Up

<p>With a 51% surge in share price since Oct on the back of the strengths in intra-Asia freight rates and the positive news on signing of the Regional Comprehensive Economic Partnership (RCEP), <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>)'s valuations have entered into historical high levels. Despite a projected high ROE of 29% for FY21, its P/B multiple of 4.65x has already blown through the roof. </p><p>We still think that SITC is a very quality company with solid fundamentals, but the current valuations look to have overweighed the positive factors but turned a blind eye on the risks. These include the sustainability of elevated freight rates, potentially higher charter costs and remote contribution from RCEP; and we believe it is prudent to lighten position in SITC now. Meanwhile, the key upside risks are a better-than-expected volume, declaration of special dividends and further spike in freight rates. </p>

With a 51% surge in share price since Oct on the back of the strengths in intra-Asia freight rates and the positive news on signing of the Regional Comprehensive Economic Partnership (RCEP), SITC International (1308 HK)'s valuations have entered into historical high levels. Despite a projected high ROE of 29% for FY21, its P/B multiple of 4.65x has already blown through the roof. We still think that SITC is a very quality company with solid fundamentals, but the current valuations look to have overweighed the positive factors but turned a blind eye on the risks. These include the sustainability of elevated freight rates, potentially higher charter costs and remote contribution from RCEP; and we believe it is prudent to lighten position in SITC now. Meanwhile, the key upside risks are a better-than-expected volume, declaration of special dividends and further spike in freight rates. 

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