[ET Net News Agency, 29 October 2018] HSBC Global Research lowered its target price for
SITC International (01308) to HK$8.2 from HK$9, and maintained its "buy" rating.
The research house said SITC's volumes declined 1% y-y in 3Q, weaker versus 2% growth in
2Q. However this was more than offset by a 5% increase in ASP despite the headwinds from a
high base, weaker RMB (-2% versus USD in 3Q) and SITC's rising exposure to South East
Asia.
With volumes down 1.6% y-y in first 9 months of 2018, HSBC sees downside to the
company's volume guidance as a sharp recovery is less likely during 4Q due to a high base,
and potentially lower than expected capacity addition by SITC.
HSBC trimmed its 2018-20 profit estimates by 5-9%; still implies 18% CAGR in 2019-20.
(KL)