SMRT

SMRT: Deutsche maintains Sell at target price 2.05. Valuation unattractive at P/E 20x and 3yr EPS CAGR of 3%. SMRT to report earnings on 29 Oct. Analysts expect earnings to decline 21% YoY even though revenue is expected to increase 5% due to costs from CCL. Mgmt projects continuing losses from CCL ops and increased costs as well…

CCL and bus ridership in August grew 13% and 7% YoY respectively, in line with Deutsche’s expectations. Downside risks include shortfall in Circle Line (CCL) ridership and higher start-up costs of operation.