SMRT: OCBC further justifies its “Hold” call

In Infrastructure on 20/05/2012 at 5:16 am

Remember that with the exception of JP Morgan and OCBC, all other brokers are calling a “sell” on SMRT. Only Morgan And OCBC were SMRT bulls.

Share price has held steady since results

As for SMRT’s share price, it has held steady despite initial selling pressure following its weak FY12 results, and has managed to outperform the FTSE STI Index over the past two and a half weeks (-0.9% vs. -5.3%). While the COI continues its public hearings, we deem the possibility of further sharp sell-offs to be remote as SMRT services and its operational cash flows remain in demand and resilient.

Maintain HOLD

We reiterate our belief that SMRT will not have difficulty addressing its higher capital outlay requirements given its existing net cash position and available MTN programme, and leave our conservative 60% PATMI dividend payout ratio estimates unchanged. Maintain HOLD with a fair value estimate of S$1.71.

  1. SMRT is going to be nationalized, or at least partly, sooner than later. I would rate it a sell.

    • IF DBS says it ,it is not appropriate. OCBC seems to favour GLCs most of the times. I kind of suspect OCBC is the “National Bank” by default. I think SMRT is “swimming in muddy water” now. If you can’t see clearly will you take the next step unnecessarily? Wait and see what the monkeys going to do with this over-used and over-loaded people’s asset. Besides whole upgrading i doubt SMRT can service the overloaded population. SMRT is not meant to carry 5.0 to 5.5 million people. Mark my words, it will continue to break down again and again unless the whole system is upgraded.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: