SMRT

SMRT: Kim Eng maintains sell with PT of $1.71. Expect Circle Line losses to continue weighing on grp profits for nxt 1-3yrs, highlighting population density per station will be less than 35,000, vs NEL’s station population density of 52,600 taking at least 3 yrs to break even…

Further notes that Capex for FY10 likely to remain 50% higher vs FY09, on back of spending on commercial property operations, purchase of new COEs for taxis & trains. At current valuations of 21X FY10E PE, stock appears pricy, and recommends switching to Comfort Delgro, currently trading at 14X FY10E PE.