Stock Name: SMRT
Company Name: SMRT CORPORATION LTD
Research House: Phillip Securities
It cites other investment merits including growth of its ancillary business (advertising and retail rental), its incumbent status in rail (which the house sees as likely cannibalizing bus ridership with plans to extend Singapore’s rail network to 270 km by 2020) and the stock being low beta with a commitment to regular dividend payouts.
Company Name: SMRT CORPORATION LTD
Research House: Phillip Securities
Phillip upgrades SMRT Corp. (S53.SG) to Buy from Hold and raises its fair value to $2.30 from $2.18. “Government efforts to promote the use of public transportation will benefit local transport operators, such as SMRT & ComfortDelGro (C52.SG). SMRT will be a bigger beneficiary of this trend with its concentrated exposure to Singapore’s Land Transport sector.”
It cites other investment merits including growth of its ancillary business (advertising and retail rental), its incumbent status in rail (which the house sees as likely cannibalizing bus ridership with plans to extend Singapore’s rail network to 270 km by 2020) and the stock being low beta with a commitment to regular dividend payouts.
It adds the current market price values the stock at 20X trailing 12-month EPS and 4X BVPS, “which is above the stock’s historical trading range. However, we believe that such high valuations are justified given our PATMI growth forecasts of 2.1% and 15.2% in FY12e and FY13e.”
The shares are up 1.0% at $1.97.
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