SMRT – Lim and Tan

Small Impact

The end of transfer penalties and the resultant decline in overall train / bus fares will lead to about $16 mln loss in revenue on an annualized basis for both SMRT (as well as for Comfort Delgro‘s SBS Transit).

But somehow, as in the past, such “setback” (like the costs associated with the Circle Line) will probably not affect SMRT’s bottom-line much.

Fact remains SMRT is at a new all-time high (obviously also benefiting from the surge in COE premiums for instance), while Comfort Delgro is 35% off its high.

One can only hope SMRT stays Singapore-centric.

We are holding on to our BUY call.

SMRT will release its result for ye Mar ’10 on Friday Apr 30th. An unchanged 6 cents final dividend is a forgone conclusion. (Together with the 1.75 cents interm, yield at $2.19 is 3.5%.)

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