[ET Net News Agency, 26 August 2019] HSBC Global Research raised its target price for
SITC International (01308) to HK$8.6 from HK$8.5 and maintained its "hold" rating.
The research house said SITC's recurring profit of US$105m in 1H was a record high
driven by stable bunker prices, lower charter rates, and a solid 1Q in terms of volume and
ASP. Despite the strong 1H results, HSBC noted that volume growth deteriorated in 2Q.
During the results briefing, management attributed the volume decline to weak business
sentiment due to escalation in US-China trade tensions. SITC said that regional trade in
South East Asia was weaker than expected, albeit it is bottoming out and SITC should
benefit from the exit of some competitors.
HSBC raised its 2019 profit estimates by 6% but maintained its 2020-21 estimates largely
unchanged. (KL)