SMRT - SMRT cut to Underperform by CIMB with $1.95 target

Stock Name: SMRT
Company Name: SMRT CORPORATION LTD
Research House: CIMB

CIMB downgrades SMRT (S53.SG) to Underperform from Neutral, cuts target price to $1.95 from $2.31 after lowering FY12-13 EPS estimates by 3%-4%, factoring in higher capex assumptions, according to Dow Jones.



“We remain wary of losses on the Circle Line with the opening of more stations in 2011, and margin pressure from rising fuel and electricity costs,” says CIMB.



Research house says Circle Line may take four years to break even vs three years for North-East Line, run by rival ComfortDelgro’s (C52.SG) SBS Transit (S61.SG) unit.



Notes North-East Line ridership supported by large population catchment, giving it edge over Circle Line. Shares off 1.0% at $2.07.