31 July 2014
SMRT Corp Ltd Improved quarter a positive amid a stalled Rail Financing Framework proposal SINGAPORE | TRANSPORT SERVICES | COMPANY UPDATE
1Q FY15 Revenue increased 4.3%y-y to S$297.1 million, out-paced by 32.0%yy growth in EBIT to S$29.3 million and 36.8%y-y growth in PATMI to S$22.4 million. SMRT and LTA in a deadlock over Rail Financing Framework (RFF), while the Land Transport Authority (LTA) estimates that SMRT has S$2 billion obligations between 2014 and 2019. Maintain "Reduce" rating, with revised TP of $1.470.
What is the news? 1Q FY15 financial results – SMRT announced its 1Q FY15 financial results on 30 July after market hours, followed by the briefing for analysts and media. Moderate Revenue growth of 4.3%y-y was outpaced by 32.0%y-y and 36.8%y-y growth in EBIT and PATMI respectively. EBIT growth was mainly due to lower operating loss from Fare business, which consequently lifted PATMI. Rail Financing Framework proposal – Transport Minister and LTA issued statements saying that LTA and SMRT are far from coming to an agreement and LTA revealed its considerations to the framework. LTA takes action against SMRT – SMRT was slapped with a S$1.6 million fine for four service disruptions that occurred between Oct 2013 and May 2014.
FY13 1,119 101 0.066 23.0 0.505 3.0 0.025 1.6%
FY14 1,164 62 0.041 26.4 0.527 2.0 0.022 2.0%
FY15F 1,228 81 0.053 29.4 0.558 2.8 0.029 1.8%
FY16F 1,273 78 0.052 30.3 0.580 2.7 0.028 1.8%
Raw Beta (Past 2yrs weekly data)
0.31
Market Cap. (USD mn / SGD mn)
1912 / 2381
Ent. Value (USD mn / SGD mn)
2335 / 2909
3M Average Daily T/O (mn)
4.39
Closing Px in 52 wk range
1.01
1.66
1.80 1.60 1.40 1.20 1.00 0.80 0.60
40 35 30 25 20 15 10 5 0
Volume, mn
Apr-14
FY12 1,057 142 0.092 19.1 0.515 3.4 0.075 4.2%
Company Data
Jan-14
Key Financial Summary FYE Mar Revenue (SGD mn) NPAT, a dj. (SGD mn) EPS, a dj. (SGD) P/E (X),a dj. BVPS (SGD) P/B (X) DPS (SGD) Di v. Yi el d (%) Source: Bl oomberg, PSR es t.
Company Description SMRT Corp Ltd (SMRT) i s a mul ti -moda l l a nd tra ns port opera tor i n Si nga pore. SMRT opera tes two Ma s s Ra pi d Tra ns i t (MRT) Li nes , the Buki t Pa nja ng Li ght Ra i l Tra ns i t (BPLRT) s ys tem, bus es a nd ta xi s . A s i gni fi ca nt pa rt of i ts profi ts come from i ts a nci l l a ry bus i nes s es of Renta l & Adverti s i ng. SMRT a l s o ha s a s ta ke i n Shenzhen Zona Tra ns porta ti on, a l a nd tra ns port opera tor ba s ed i n Shenzhen.
Oct-13
Investment Actions We update our forecasts accordingly, lifting our TP for SMRT. However, the transition to RFF for the Rail business remains in limbo, with the spectre of the S$2 billion obligation looming ahead. We maintain our "Reduce" rating on SMRT, but with a higher TP of S$1.470.
(Maintained at "Reduce") Target Price (SGD) 1.470 Forecast Dividend (SGD) 0.029 Closing Price (SGD) 1.565 Potential Upside -6.1%
Jul-13
How do we view this 1Q FY15 financial results – Revenue of S$297.1 million came to within 0.6% of our S$299.0 million estimate. The most significant contributor to what we did get wrong however, was our estimate for "other operating expenses" which resulted in an under-estimation of 1Q FY15 EBIT by approximately 24%. Rail Financing Framework proposal – The statements by both Transport Minister and LTA have made it unequivocally clear that the transition to the RFF has reached an impasse. As such, SMRT will have to continue being responsible for capital expenditures for the foreseeable future, until LTA and SMRT can come to an agreement. S$1.6 million fine meted out by LTA – The fine serves as a timely reminder to investors of the heightened business risk brought about by the new Bill passed in Parliament raising the cap of the maximum fine for rail service disruptions.
Reduce
Rating:
MRT SP Equit y
Major Shareholders 1. Tema s ek Hol di ngs Pte Ltd 3. Va ngua rd Group Inc 3. Norges Ba nk Inves tment Mgmt.
STI rebased
(%) 54.2 0.5 0.5
Valuation Method DCF (WACC: 5.1%, Termi na l g: 1.0%) Analyst Richard Leow, CFTe ri cha rdl eowwt@phi l l i p.com.s g +65 6531 1735
*Forward multiples & yields based on current market price; historical multiples & yields based on historical market price.
Page | 1 MCI (P) 046/11/2013 Ref. No.: SG2014_0112
SMRT Corp Ltd 31 July 2014 Results at a glance (SGD mn) MRT LRT Bus Ta xi Rental Advertis i ng Engineering & Other Services
Revenue EBITDA Operating Profit/(Loss) MRT LRT Bus Ta xi Rental Advertis i ng Engineering & Other Services
EBIT PATMI Source: Compa ny, PSR
1Q15 157.9 2.5 58.1 34.4 25.8 9.4 9.1 297.1 74.2
1Q14 153.5 2.6 57.0 33.0 23.5 8.2 7.0 284.8 62.1
5.0 (0.6) (5.5) 4.2 20.0 5.6 0.1 29.3 22.4
2.9 (0.6) (7.5) 2.3 17.7 4.8 0.5 22.2 16.3
y-y (%) 4Q14 q-q (%) Comments 2.8% 153.5 2.9% Growth i n ri ders hi p a nd a vera ge fa re. -6.3% 2.5 -0.8% 1.9% 54.8 5.9% 4.5% 34.3 0.5% Hi gher rental i ncome from newer fl eet. 10.0% 25.1 3.0% 13.7% 8.1 16.2% Increa s ed a dvertis i ng on tra i ns a nd s tations . 30.0% 11.3 -19.7% 4.3% 289.5 2.6% Most business segments revenue up. 19.5% 67.3 10.3% 73.4% 2.7% -26.6% 84.5% 13.4% 18.0% -80.6% 32.0% 36.8%
1.2 (0.5) (4.4) 3.8 18.7 4.4 0.8 21.9 16.9
320% 10.5% 24.8% 8.8% 7.3% 28.3% -87.0% 33.8% 32.2%
Hi gher revenue a nd l ower el ectri ci ty cos ts . Hi gher revenue offs et by hi gher s taff a nd di es el cos ts . Lower di es el tax from a s ma l l er di es el fl eet. Hi gher rental renewa l ra tes .
Lower opera ting l os s i n Fa re bus i nes s .
Adjustments made to our forecasts As we had over-estimated the "other operating expenses", we adjust our forecasts for this expense downwards. Adjusted FY2015F capital expenditure downwards from S$650 million to S$600 million, in line with guidance given during the analyst and media briefing. SMRT's 3M FY15 Revenue, operating profit and PATMI now stand at 24.2%, 26.0% and 27.7% respectively of our full year FY15F estimates. Rail Financing Framework (RFF) comes to a stall Statements by Transport Minister and LTA – With reference to the proposed RFF, Transport Minister stated that an agreement has not been reached between SMRT and LTA, "nor are they close" and that "there remains a wide gap between SMRT's expectations and LTA's position". LTA revealed that its considerations are the value of existing assets and SMRT's estimated obligations of S$2 billion under the existing licences. Citing confidentiality agreement, SMRT was not able to give further details on the "wide gap". SMRT did however, provided clarification that the S$2 billion arises from taking over of assets for the North-South East-West Line (NSEWL), Circle Line (CCL), Bukit Panjang LRT (BPLRT) and other signalling equipment. iMOB e-commerce website SMRT recently launched its e-commerce portal iMOB (I'm On Board). Management declined to give details on the number of hits the site has received, explaining that the site is still at its infancy, and such numbers would not be meaningful. Management explained that such a venture brings together SMRT's existing strengths in transport and retail, for a small incremental capital expenditure to reach out to a huge base of 3 million passengers on a daily basis.
Page | 2
SMRT Corp Ltd 31 July 2014 Heightened business risk: S$1.6 million fine by LTA In a prior Singapore Land Transport Sector report (29 April 2014), we highlighted the heighted business risk arising from the changes to the Rapid Transit System (Amended) Bill. The maximum fine for each rail disruption was previously capped at S$1 million, but the new cap effective from 25 March 2014 had been increased to 10% of annual revenue of the affected line or S$1 million, whichever is higher. SMRT operates the NSEWL and CCL; we estimate the FY14 revenue for each of the lines to be S$507 million (est.) and S$127 million (est.) respectively. Hence the maximum fine for each NSEWL disruption could be as much as S$50.7 million, and S$12.7 million for each CCL disruption. SMRT was slapped with a S$1.6 million fine by the LTA on 21 July 2014 for the following four service disruptions which occurred between October 2013 and May 2014: Oct 9, 2013, Disruption of train services on the East-West Line between Boon Lay and Joo Koon stations after a train passed a red signal light and damaged a track point. (Fined: S$400,000) Jan 20, 2014, Disruption of train services on the North-South Line due to a train that stalled between Yio Chu Kang and Ang Mo Kio stations. (Fined: S$200,000) Jan 22, 2014, Disruption of train services on the East-West Line between Tampines and Tanah Merah stations after a train passed a red signal light and damaged a track point. (Fined: S$900,000) May 2, 2014, Disruption of train services on the North-South Line between Yio Chu Kang and Yishun stations (Fined: S$100,000) To give a sense of perspective, S$1.6 million is equivalent to 5.3% of the S$30.4 million cash SMRT paid out as dividends during FY14. Alternatively, S$1.6 million translates to an estimated reduction of 0.105 S Cents available for distribution as dividends to shareholders; this is approximately 4.8% of the 2.20 S Cents ordinary dividend declared for FY14. SMRT explained during the analyst and media briefing that it has accrued the S$1.6 million fine under "Other operating expenses" (Rail) in this quarter, and stated that it has the ability to pay the fine. Unresolved disruptions When questioned on what are the outstanding Rail disruptions that LTA is currently investigating, SMRT replied that all disruptions are publicly known, and LTA will investigate the incidents as it deems fit. As such, SMRT is not aware of specific disruptions that LTA is currently investigating. We point out that SMRT has had at least two recent train disruptions, which we think LTA are investigating. So there is a possibility of more fines being meted out to SMRT. Jan 11, 2014, Train services between Kranji and Yew Tee were disrupted for 2 hours due to a power fault, resulting in some passengers having to walk on the tracks to get to the Kranji station. July 23, 2014, A train had stalled between Novena and Newton stations and had to be pushed to the Newton station, resulting in a 40-minute delay.
Page | 3
SMRT Corp Ltd 31 July 2014 Status of Rail Reliability: Incidents on NSEWL Service Delays and Train Withdrawals are the two key indicators of train reliability that the LTA uses. We see that there has been improvements in Rail Reliability across the board, except for NSEWL where there is a slight uptick in Incidents (>5 min delay) per 100,000km for the period 6M CY2014. NSEWL is operated by SMRT and this reduction in reliability increases the probability of fines being imposed on SMRT. Fig 1. Incidents per 100,000km (>5 min delay) NSEWL
3.5
NEL
Fig 2. Normalised Train Withdrawals (per 100,000 train-km) NSEWL
3.5
CCL
3.0
3.0
2.5
2.0
2.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
CCL
Source: LTA, PSR
Source: LTA, PSR 2.5
NEL
0.0 2009
2010
2011
2012
2013
6M14
2008
2009
2010
2011
2012
2013
6M14
Incorporation of Singapore Rail Engineering (SRE) SMRT incorporated a subsidiary, Singapore Rail Engineering. During the analyst and media briefing, Management explained that the objective of SRE is to build up its competency and develop Maintenance Repair and Overhaul (MRO) capabilities. We think that this is a positive development for SMRT. SMRT has a long history of operating a rail network, and now coupled with engineering expertise, it can market its capabilities overseas in countries that are developing their own rail network. Stretched valuations While we recommend a DCF-derived target price of S$1.470, we also highlight that valuations are currently stretched. Both trailing and forward P/E are at unprecedented high levels of more than 30x. Current price of SMRT is at the upper level of the P/E derived price band. Even our valuation of S$1.470 in conjunction with FY15F EPS of S$0.053 gives an implied forward P/E of 27.7x. As such, we think that any further price upside is not sustainable. Fig 3. Trailing P/E (TTM) with forward P/E (NTM) 60x
P/E, TTM
50x
P/E, NTM
Fig 4. Historical price with forwrd P/E derived price bands (S$) 2.40 Source: Company, Bloomberg, PSR est. 2.20 2.00 1.80 1.60 PX_LAST 1.40 30x fwd P/E 1.20 25x fwd P/E 1.00 20x fwd P/E 0.80
Source: Company, Bloomberg, PSR est.
40x 30x 20x 10x
Jun-14
Dec-13
Jun-13
Dec-12
Jun-12
Dec-11
Jun-11
Dec-10
Jun-10
Dec-09
Jun-14
Dec-13
Jun-13
Dec-12
Jun-12
Dec-11
Jun-11
Dec-10
Jun-10
Dec-09
Remarks: Unprecedented P/E levels.
Remarks: Current price at upper level of P/E derived price band.
Page | 4
SMRT Corp Ltd 31 July 2014 Quarterly Revenue and Profitability data Fig 5. Revenue (S$ mn)
Fig 6. Revenue by Fare/Non-Fare Business (S$ mn)
Revenue
350 300 250 200 150 100 50 0
%y-y, RHS
Source: Company, PSR
15% 10%
5% 0%
350 300 250 200 150 100 50 0
Fare
Fare %y-y, RHS
10%
5% 0% Source: Company, PSR -5% 1Q15
4Q14
3Q14
Bus
2Q14
LRT
1Q14
MRT
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
Remarks: Higher y-y growth for Non-Fare revenue than Fare revenue.
Fig 7. Revenue by Business (S$ mn) 180 160 140 120 100 80 60 40 20 0
Non-Fare %y-y, 20% RHS
15%
2Q12
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
Remarks: Revenue grew 4.3%y-y.
Non-Fare
Revenue Segmentation for YTD 3M15
Taxi
Rental
Advertising
Source: Company, PSR
Engineering & Other Services
9%
3% 3%
12%
53%
19% 1%
2Q12 3Q12 4Q12 1Q13 2Q13 Remarks: Highest source of revenue from MRT fares.
3Q13
4Q13
1Q14
Fig 8. Operating profit (S$ mn)
2Q14
3Q14
4Q14
1Q15
Fig 9. Operating profit by Fare/Non-Fare Business (S$ mn) Fare Fare %y-y, RHS
Non-Fare Non-Fare %y-y, RHS
Source: Company,150% PSR
60
40
100%
40
0%
30
50%
20
-100%
20
0%
10
-50%
Operating profit
50
%y-y, RHS
0
100%
0
-200% Source: Company, PSR
-100% -20
-300% 1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
Remarks: 1Q15 EBIT grew 32.0%y-y.
Remarks: Lower y-y operating loss from Fare business.
Fig 10. Operating profit by Business (S$ mn)
MRT
30 25 20 15 10 5 0 -5 -10 -15 2Q12
3Q12
LRT
Bus
4Q12
Taxi
Rental
1Q13
Advertising
2Q13
3Q13
Fig 11. Net profit (S$ mn)
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
Fig 12. Earnings per share, adj. (S Cents)
Net profit
40
Source: Company, PSR
Engineering & Other Services
%y-y, RHS
30 20 10
2.0
1.5 1.0 0.5
0.0 1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
Remarks: 1Q15 Net profit grew 36.8%y-y.
Source: Company, PSR
2.5
3Q12
0
EPS, adj.
3.0
2Q12
Source: Company,250% PSR 200% 150% 100% 50% 0% -50% -100%
Remarks: 1Q15 1.50 S Cents EPS.
Page | 5
SMRT Corp Ltd 31 July 2014 Quarterly Financial Indicators Fig 13. EBITDA, EBIT & Net margins 35%
EBITDA margin
EBIT margin
Net margin
Source: Company, PSR
30% 25% 20% 15%
10% 5% 0% 2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
Fig 14. Operating Margin by Business MRT
100%
LRT
3M14
3M15
y-y comparison for YTD 3M15
Bus
Taxi
Rental
Advertising
Engineering & Other Services
Source: Company, PSR
80% 60% 40% 20% 0% -20% -40% 2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
3M14
3M15
Remarks: (1) Rental and Advertising have the highest operating Margins. (2) LRT and Bus are loss-making.
YTD 3M15 performance with Historical performance Fig 15. Revenue (S$ mn) 1,400
Revenue
Fig 16. Operating profit (S$ mn) 3M14
3M15
Source: Company, PSR est.
1,200
250
Operating Profit
3M14
3M15
Source: Company, PSR est.
200
1,000 800
150
600
100
400
50
200 0
0 FY11
FY12
FY13
FY14
FY15F
Remarks: 3M15 Revenue 24.2% of FY15F.
FY11
FY12
FY13
FY14
FY15F
Remarks: 3M15 EBIT 26.0% of FY15F.
Fig 17. Net profit (S$ mn) 200
Net profit
3M14
3M15
Source: Company, PSR est.
150 100 50 0 FY11
FY12
FY13
FY14
FY15F
Remarks: 3M15 adj. Net profit 27.7% of FY15F.
Page | 6
SMRT Corp Ltd 31 July 2014 FYE Mar Income Statement (SGD mn) Revenue Other opera ti ng i ncome EBITDA Depreci a ti on & Amorti s a ti on EBIT Net Fi na nce (Expens e)/Inc Other i tems As s oci a tes & JVs Excepti ona l i tems Profit Before Tax Ta xa ti on Profit After Tax - Non-control l i ng i nteres t Net Income, reported Net Income, adj.
FYE Mar Per share data (SGD) EPS, reported EPS, a dj. DPS BVPS FYE Mar Cashflow Statements (SGD mn) CFO PBT Adjus tments WC cha nges Ca s h genera ted from ops Others Cashflow from ops CFI CAPEX, net Di vd from a s s oci a tes & JVs Others Cashflow from investments CFF Sha re i s s ua nce, net Loa ns , net of repa yments Di vi dends Others Cashflow from financing Net change in cash Effects of excha nge ra tes CCE, end Source: Compa ny Da ta , PSR es t
FY12
FY13
FY14 FY15F FY16F
1,057 1,119 1,164 1,228 1,273 22 36 42 44 46 300 278 256 302 300 (130) (151) (171) (189) (190) 170 127 84 113 110 (4.5) (4.8) (9.2) (15.0) (14.9) 2.7 (0.4) (0.4) (0.4) (0.4) (22) (17) 147 105 75 97 94 (27) (22) (13) (17) (17) 120 83 61 80 78 (0.1) (0.4) (0.5) (0.5) 120 83 62 81 78 142 101 62 81 78
FY12 0.078 0.092 0.075 0.515 FY12
FY13 0.055 0.066 0.025 0.505 FY13
FY14 FY15F FY16F 0.041 0.041 0.022 0.527
0.053 0.053 0.029 0.558
0.052 0.052 0.028 0.580
FY12 1,346 14 68 15 1,443 54 64 195 0.0 313 1,756 546 58 604 150 210 360 965 791
FY13 1,436 14 51 32 1,532 60 86 546 692 2,224 2 577 54 633 607 216 823 1,456 0.3 768
FY14 FY15F FY16F 1,642 14 53 21 1,729 84 99 5.0 156 344 2,073 156 355 54 566 480 225 705 1,271 (0.1) 802
1,973 14 52 21 2,059 89 104 5.0 188 387 2,446 156 375 72 603 780 215 995 1,598 (0.6) 849
1,984 14 51 21 2,070 92 108 5.0 226 432 2,502 156 389 90 635 780 204 984 1,619 (1.1) 884
FY14 FY15F FY16F
147 105 75 175 193 187 10.5 (18.9) (12.8) 332 279 249 (50) (19) (15) 282 260 234
97 207 9.4 314 (32) 281
94 208 6.7 309 (32) 277
(234) (248) 0.2 0.2 (0.0) (14.4) (234) (262)
(649) 0.2 6.5 (643)
(531) 0.2 0.4 (530)
(212) 0.2 0.5 (211)
0.41 (100) (129) 0.1 (229) (181) (0.0) 195
0.05 29 (30) 18.9 17 (391) 0.2 156
300 (33) 15.2 282 33 188
(44) 15.2 (28) 38 226
0.57 460 (109) 2.5 353 351 (0.1) 546
FYE Mar Balance Sheet (SGD mn) PPE Inta ngi bl es As s oci a tes & JVs Inves tments Others Total non-current assets Inventori es Accounts Recei va bl es Inves tments Ca s h Others Total current assets Total Assets Short term l oa ns Accounts Pa ya bl es Others Total current liabilities Long term l oa ns Others Total non-current liabilities Total Liabilities Non-control l i ng i nteres t Shareholder Equity
FYE Mar Valuation Ratios P/E (X), a dj. P/B (X) EV/EBITDA (X), a dj. Di vi dend Yi el d (%) Growth & Margins (%) Growth Revenue EBITDA EBIT Net Income, a dj. Margins EBITDA ma rgi n EBIT ma rgi n Net Profi t Ma rgi n Key Ratios ROE (%) ROA (%) Net Debt/(Ca s h) Net Gea ri ng (X)
FY12
FY13
FY14 FY15F FY16F
19.1 3.4 8.9 4.2%
23.0 3.0 8.5 1.6%
26.4 2.0 8.3 2.0%
29.4 2.8 10.3 1.8%
30.3 2.7 10.3 1.8%
9.0% 5.9% 4.0% 5.5% -4.7% -7.3% -8.1% 18.0% -12.9% -25.1% -33.9% 33.6% -12.1% -28.9% -38.5% 30.3%
3.7% -0.6% -2.5% -2.8%
28.4% 24.8% 22.0% 24.6% 23.5% 16.1% 11.4% 7.2% 9.2% 8.6% 11.3% 7.4% 5.3% 6.5% 6.1% 17.8% 12.9% 8.4% 5.1% (45) Net Cash
63 0.08
7.9% 2.9%
9.8% 3.6%
9.0% 3.2%
481 0.60
748 0.88
710 0.80
*Forward multiples & yields based on current market price; historical multiples & yields based on historical market price.
Page | 7
SMRT Corp Ltd 31 July 2014 Ratings History 2.20
Source: Bl oomberg, PSR
Market Price Target Price
2.00 1.80
1.60 1.40 1.20
1.00 0.80 0.60
Dec-14
Sep-14
Jun-14
Mar-14
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
Sep-12
Jun-12
1 2 3 4 5 PSR Rating System Total Returns Recommendation Rating > +20% Buy 1 +5% to +20% Accumul a te 2 -5% to +5% Neutra l 3 -5% to -20% Reduce 4 < -20% Sel l 5 Remarks We do not ba s e our recommenda tions entirel y on the a bove qua ntitative return ba nds . We cons i der qua l i tative fa ctors l i ke (but not l i mi ted to) a s tock's ri s k rewa rd profi l e, ma rket s entiment, recent ra te of s ha re pri ce a ppreci a tion, pres ence or a bs ence of s tock pri ce ca tal ys ts , a nd s pecul a tive undertones s urroundi ng the s tock, before ma ki ng our fi na l recommenda tion
Page | 8
SMRT Corp Ltd 31 July 2014 Important Information This publication is prepared by Phillip Securities Research Pte Ltd., 250 North Bridge Road, #06-00, Raffles City Tower, Singapore 179101 (Registration Number: 198803136N), which is regulated by the Monetary Authority of Singapore (“Phillip Securities Research”). By receiving or reading this publication, you agree to be bound by the terms and limitations set out below. This publication has been provided to you for personal use only and shall not be reproduced, distributed or published by you in whole or in part, for any purpose. If you have received this document by mistake, please delete or destroy it, and notify the sender immediately. Phillip Securities Research shall not be liable for any direct or consequential loss arising from any use of material contained in this publication. 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SMRT Corp Ltd 31 July 2014 This material is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The products mentioned in this material may not be suitable for all investors and a person receiving or reading this material should seek advice from a professional and financial adviser regarding the legal, business, financial, tax and other aspects including the suitability of such products, taking into account the specific investment objectives, financial situation or particular needs of that person, before making a commitment to invest in any of such products. Please contact Phillip Securities Research at [65 65311240] in respect of any matters arising from, or in connection with, this document. This report is only for the purpose of distribution in Singapore. Contact Information (Singapore Research Team) Management Chan Wai Chee (CEO, Research - Special Opportunities) Joshua Tan (Head, Research - Equities & Macro) Equities | Macro Joshua Tan Soh Lin Sin
+65 6531 1249 +65 6531 1516
Finance Benjamin Ong
+65 6531 1535
Telecoms Colin Tan
+65 6531 1221 SINGAPORE Phillip Securities Pte Ltd Raffles City Tower 250, North Bridge Road #06-00 Singapore 179101 Tel +65 6533 6001 Fax +65 6535 6631 Website: www.poems.com.sg
Research Operations Officer Jermaine Tock +65 6531 1240
+65 6531 1231 +65 6531 1249 Market Analyst | Equities Kenneth Koh +65 6531 1791
US Equities Wong Yong Kai
+65 6531 1685
Real Estate Caroline Tay
Real Estate Lucas Tan
+65 6531 1229
+65 6531 1792
Transport Richard Leow, CFTe +65 6531 1735 Contact Information (Regional Member Companies) MALAYSIA Phillip Capital Management Sdn Bhd B-3-6 Block B Level 3 Megan Avenue II, No. 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur Tel +603 2162 8841 Fax +603 2166 5099 Website: www.poems.com.my
HONG KONG Phillip Securities (HK) Ltd 11/F United Centre 95 Queensway Hong Kong Tel +852 2277 6600 Fax +852 2868 5307 Websites: www.phillip.com.hk
JAPAN Phillip Securities Japan, Ltd. 4-2 Nihonbashi Kabuto-cho Chuo-ku, Tokyo 103-0026 Tel +81-3 3666 2101 Fax +81-3 3666 6090 Website: www.phillip.co.jp
INDONESIA PT Phillip Securities Indonesia ANZ Tower Level 23B, Jl Jend Sudirman Kav 33A Jakarta 10220 – Indonesia Tel +62-21 5790 0800 Fax +62-21 5790 0809 Website: www.phillip.co.id
CHINA Phillip Financial Advisory (Shanghai) Co Ltd No 550 Yan An East Road, Ocean Tower Unit 2318, Postal code 200001 Tel +86-21 5169 9200 Fax +86-21 6351 2940 Website: www.phillip.com.cn
THAILAND Phillip Securities (Thailand) Public Co. Ltd 15th Floor, Vorawat Building, 849 Silom Road, Silom, Bangrak, Bangkok 10500 Thailand Tel +66-2 6351700 / 22680999 Fax +66-2 22680921 Website www.phillip.co.th
FRANCE King & Shaxson Capital Limited 3rd Floor, 35 Rue de la Bienfaisance 75008 Paris France Tel +33-1 45633100 Fax +33-1 45636017 Website: www.kingandshaxson.com
UNITED KINGDOM King & Shaxson Capital Limited 6th Floor, Candlewick House, 120 Cannon Street, London, EC4N 6AS Tel +44-20 7426 5950 Fax +44-20 7626 1757 Website: www.kingandshaxson.com
UNITED STATES Phillip Futures Inc 141 W Jackson Blvd Ste 3050 The Chicago Board of Trade Building Chicago, IL 60604 USA Tel +1-312 356 9000 Fax +1-312 356 9005
AUSTRALIA PhillipCapital Level 12, 15 William Street, Melbourne, Victoria 3000, Australia Tel +61-03 9629 8288 Fax +61-03 9629 8882 Website: www.phillipcapital.com.au
SRI LANKA Asha Phillip Securities Limited 2nd Floor,Lakshmans Building, No.321, Galle Road, Colombo 03, Sri Lanka Tel: (94) 11 2429 100 Fax: (94) 2429 199 Website: www.ashaphillip.net
INDIA PhillipCapital (India) Private Limited No. 1, C‐Block, 2nd Floor, Modern Center , Jacob Circle, K. K. Marg, Mahalaxmi Mumbai 400011 Tel: (9122) 2300 2999 Fax: (9122) 6667 9955 Website: www.phillipcapital.in
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