Am putting Auric Pacific on my watchlist after SMRT ex-ceo Saw Phaik Hwa joins.
The easy thing about Auric is that you can monitor changes in their customer appeal. If Delifrance gets crowded again, and Sunshine bread gets adverts on its plastic packaging -- LOL -- things like that, it's a good sign. Saw Phaik Hwa has a chance to redeem herself by improving things at Auric and we all will use the stock price as a metric. Reference price : 73 cents today.
Market is facing up to the harsh reality that SMRT's earnings growth will be difficult because of the higher repair & maintenance costs. And I am sure that SMRT will pull back from paying the high level of dividends you used to pay.
Looking ahead, SMRT said it expects revenue to rise in the next 12 months due to the expected rise in train and bus ridership. But earnings will be hurt by higher repair and maintenance costs, as well as expenses on energy and staff.
Several analysts have downgraded the stock or cut their price targets on concerns such as higher operational costs, regulatory risks and uncertainty surrounding the appointment of a new chief executive.
Out of 17 analysts covering the stock, 10 have sell or strong sell ratings, four have hold recommendations, while the remaining three have buy or strong buy calls, according to Thomson Reuters data.SMRT shares fell 0.3 percent to close at S$1.68 on Monday.
SMRT has some more room to fall in my view. It will pulled down by a change in sentiment towards the stock as there are big expenses & capex ahead for it.
SMRT falls as brokers cut ratings.
Written by Reuters
Wednesday, 02 May 2012 09:52
Shares of train operator SMRT Corp fell as much as 3% to a 29-month low, after it posted a sharp fall in quarterly earnings and reduced its final dividend, prompting several brokers to cut their ratings on the stock.
SMRT reported on Monday a 59% drop in fourth quarter net profit to $13.9 million, and declared a reduced final dividend of 5.70 cents compared with 6.75 cents a year ago.
SMRT shares fell 1.8% to $1.65 with more than 1.1 million shares changing hands in early trade, compared to its average daily volume of 3.2 million shares over the last five sessions.
CIMB Research cut its target price for SMRT to $1.50 from $1.55 and maintained its underperform rating, citing higher operating expenses and a cut in dividend.
“Plagued by margin erosion and cash flow strains, we see no reason to own this stock. Further, dividend yields are no longer attractive,” said CIMB in a report.
The broker added that SMRT’s plans for asset renewal will result in higher capital expenditure, while mandates for more stringent repairs and maintenance will elevate its cost structure permanently, eating into profits.
JPMorgan downgraded SMRT to neutral from overweight and cut its target price to $1.60 from $2.00.
OCBC Investment Research also downgraded SMRT to hold from buy and lowered its target price to $1.71 from $2.04, citing weaker-than-expected earnings for 2012.
It estimated that SMRT’s capital expenditure in 2013 will rise to $500 million due to higher expenses needed for upgrading its assets.
I read that it promise min 4% div, and this quater there was an impairment for their buses or whatsoever i read lah..if not cdiv will be 80% of whatsoever..
Who care, at least i know this one will not go under, even if it pay 3% of div. i will buy it. Like coca cola..Anyone???
better than s-chip.
bought donkey years below 1 dollar.
At first i thought of buying, but i like DBS, so end up buying DBS
SMRT, sad to say, will not be a stock I will want to touch even with a 6-foot pole. It's clear that profitability will slip as maintenance spending shoots up. Longer term, don't forget what has been announced === the SGD900 million in planned renewal and replacement of aging
assets over the next seven years.
SMRT expects to spend SGD500mn in capex on top of regular maintenance capex in FY13.
NextInsight
a hub for serious investors
