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): Takeaways from Call, and We Are Cautious on the Downside Risk

SITC International (1308 HK): All Priced In

Rmb Depreciation: An Angle for the Shipping Names?

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): Well, a Very Quality Company but Too Much Too Fast

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> again posted a good set of result with a 59.8% YoY growth in earnings in FY20 on the back of volume growth, higher freight rate and lower costs. Gross margin expanded a massive 7.2pp YoY in the year to record high level of 26.4%. Fuel and charter costs decreased US$54m YoY but we believe such savings will not be recurrent in FY21.</p><p>In the post-FY20 call, management maintains a positive view for FY21, guiding for good rate increase and volume growth. The key challenges in this year, however, are the surge in fuel and charter costs. We expect its momentum to stay good in 1H21, but will moderate in 2H21 due to a high base. Given the share price's 151% rally since 2020 and 30% YTD, SITC is highly vulnerable to profit-taking, especially as its 12-month P/B of 6.2x is more than 3SD above its historical average.</p>

SITC International (1308 HK) again posted a good set of result with a 59.8% YoY growth in earnings in FY20 on the back of volume growth, higher freight rate and lower costs. Gross margin expanded a massive 7.2pp YoY in the year to record high level of 26.4%. Fuel and charter costs decreased US$54m YoY but we believe such savings will not be recurrent in FY21.In the post-FY20 call, management maintains a positive view for FY21, guiding for good rate increase and volume growth. The key challenges in this year, however, are the surge in fuel and charter costs. We expect its momentum to stay good in 1H21, but will moderate in 2H21 due to a high base. Given the share price's 151% rally since 2020 and 30% YTD, SITC is highly vulnerable to profit-taking, especially as its 12-month P/B of 6.2x is more than 3SD above its historical average.

SITC International (1308 HK): Good Result Priced In, Challenges from Higher Costs