Friday, February 25, 2011

DMG keeps Singapore Land Transport sector at outperform

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

DMG notes official statistics that show more Singaporeans are using the MRT to get to work, while fewer are commuting by public bus, with the proportion of employed residents commuting by MRT only (or combined with another mode) rising to 31% in 2010 vs 24% in 2000, with declines in the proportion of commuters who go to work by public bus only. 

“The latest statistics reaffirm our belief that commuters in Singapore generally prefer MRT as a more convenient mode of transport.” However, it adds “the rapid growth of Singapore’s population will continue to drive riderships of both MRT and buses. Hence, we maintain Overweight on the land transport sector as we think ridership will continue to grow.”
The house prefers ComfortDelGro (C52.SG), rated Buy with a $1.80 target price over SMRT (S53.SG), rated Neutral with a $2.02 target. DG is flat at $1.52 and SMRT is flat at $1.95. 

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