Imagine having picked a stock that’s doubled over the past year, while still paying out 9% dividend yield. That’s exactly what SITC International Holdings (1308.HK) has delivered.
This is a niche shipping company in Hong Kong that’s driving both growth and income to investors.
In fact, shares of SITC have surged over 70% in 2025, and has maintained a generous dividend payout policy in Hong Kong’s stock market.
Despite its shares’ rapid rise, the shipping giant still trades at a modest 9x PE ratio – a valuation that’s “cheap” compared to other shipping giants.
Here’s what’s driving this high dividend yield.
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SITC International: A resilient, niche trade route that’s driving profits
SITC International was founded in 1991. It has grown from a small regional player into a major force in the Asian container shipping business.
The company went public on the Hong Kong Stock Exchange in 2010, and has since expanded across many countries.
Global shipping giants like Maersk and Orient Overseas International Line fight for market share in the long haul routes – struggling with geopolitical tensions and trade route disruptions.
Meanwhile, SITC has quietly built a money-making machine focused on the world’s fastest-growing trade corridor: Intra-Asia shipping.
Today, SITC connects 82 major ports spanning from Northeast Asia to Southeast Asia and the Indian subcontinent.
What I like about SITC is it sets itself apart from global shipping giants and focuses on regional markets. While competitors like Orient Overseas International Line chase long-haul global routes, SITC dominates the shorter but more frequent intra-Asia trades.
This approach has proven successful, generating consistent profits even during challenging market conditions.
According to market data, the intra-Asia container shipping market grew at a CAGR of 3.6% from 2019 to 2023, far outpacing the growth in global shipping trades, which grew a sluggish 0.7% CAGR.
Small ships, big advantage
Here’s the thing, SITC doesn’t chase huge ships. Instead, it runs a younger fleet of 119 smaller vessels of ~9 years old, with the majority under 2,000 TEU. Younger ships consume less fuel, require lower maintenance costs, and meet stricter environmental regulations.
This compares favourably to industry averages (Orient Overseas International Line’s fleet: ~12 years) and provides operational advantages.
This makes this niche shipping giant nimble enough to serve secondary ports – routes that global giants can’t operate profitably.
In fact, this strategy lets SITC offer 475 weekly port calls, giving customers unmatched reliability. By focusing on shorter, higher-frequency shipping runs, SITC avoids the chaos of global disruptions like Red Sea attacks or the US-China trade wars.
This intensive schedule gives customers maximum flexibility and reliability. Frequent departures reduce inventory holding costs for shippers and improve supply chain efficiency.
This also explains SITC’s preference on smaller vessels over the large ones.
Strong financial performance
In 2024, the company generated revenue of US$3 billion. Its net profits reached US$1 billion, nearly doubling from the previous year. This strong performance came from higher freight rates and increased shipping volumes.
The company’s profitability metrics are outstanding. Its ROE hit 47% in 2024. ROA reached 21%. These figures are exceptional, especially in the shipping industry.
What’s more, the figures are not one-off. In the industry’s weakest moment in 2023, the ROE and ROA were 26% and 10% respectively, still better than many companies.
Excellent dividend payout: 9.4% dividend yield
SITC offers attractive dividends to shareholders. The company maintains a dividend payout ratio of at least 70%. Current dividend yield ranges from 7% to 9%, depending on the share price.
Over the past 12 months, SITC declared a total dividend of HK$2.70 per share (excluding special dividends).
At current share prices, this is a 9.4% dividend yield. The company has been paying dividends consistently for over 15 years. This shows management’s commitment to returning cash to shareholders.
Growth potential: fleet expansion
SITC’s strategy centers on dominating the intra-Asia shipping market. The company believes this region offers the best growth prospects.
To seize the regional opportunities, SITC has been actively expanding its fleet to expand its service range and frequency. In 2024, eight new container vessels and one second-hand vessel were delivered.
Between 2022 and 2024, the capital expenditure on vessels was ~US$ 1 billion, equal to the net profit of 2024.
However, from the graph we can see a gradual decrease in Capex in recent years that may imply SITC’s investment cycle is near an end.
This can be proved by SITC’s debt to equity ratio, which has been on a downtrend in the last five years. Following the decrease, the debt to equity ratio was ~16% in 2024, a healthy level.
My final thoughts
At first glance, shipping seems like a tough business – volatile freight rates, heavy costs, and global disruptions. But SITC shows that not all shipping companies are the same.
At a 9% dividend yield, SITC International is a niche shipping giant. By focusing on intra-Asia routes, operating a flexible, younger fleet, and keeping a disciplined balance sheet, SITC has built a business model that is both profitable and defensive.
