-
]HSBC raises SITC (01308) to HK$10
HSBC Global Research lifted its target price for
SITC (01308) to HK$10 from HK$8.2, and maintained its "buy" rating.
  The research house noted SITC has strong competitive positioning in the intra-Asia trade
route with its niche business model. It is a clear beneficiary of continued strong trade 
and consolidation in the region. SITC guided for a high single-digit growth in 2018 (vs. 
9% CAGR in 2010-16) mainly driven by continuing strength in the ASEAN market coupled with
the addition of new port calls. SITC also expects the sequential improvement in its
freight rates to persist going in to 2018.
  HSBC tweaks its 2017 profit estimates to reflect the company's upgraded profit guidance.
In 2018-19e HSBC increases its profit estimates by 7-13% to reflect higher volume growth 
offset to some extent by higher bunker price assumptions. Its revised estimates imply ROE
could improve from 18% in 1H17 to 24% by 2019e. It forecasts a 20% CAGR in recurring 
profits in 2017-19e.

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