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%.)