Monday, October 25, 2010


SMRT: PhillipsCapital maintains Hold, TP at $2.18, representing forward P/E of 19.6x on estimated earnings. Ridership for Aug 10 was higher than Phillips’ expectation, rail 11.8% for first 8 mths (forecast 10%). Revenues are expected to increase in 2Q10 on back of higher ridership and mega events although higher maintenance costs are expected…

Economic environment is expected to be inflationary but SMRT is unlikely to be able to raise costs due to regulatory requirements. Recommends Comfort Delgro (14.7x current P/E for exposure to transport sector). Breakdown of costs are different from Deutsche but view remains bearish on stock.

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