SMRT

SMRT Corporation Ltd (SMRT) is Singapore’s premier multi-modal public transport service provider offering integrated transport services island-wide.

SMRT has come a long way, from the trains to the taking over of TransIsland buses and now their new line of taxis. Their niche, the MRTs have a daily ridership of 1.366mil. And with the new circle line expected to be up by 2010, one can only think about how their revenue is going to increase. SMRT’s buses fetch a 781,000 ridership daily which totals to over 2mil ridership daily. Not forgetting revenue generated from their LRTs, Taxis, advertising and now retail space (you may realize that more and more MRT stations are opening shops).

Revenue and ridership is expected to grow. With our government trying to keep lesser cars on the road, people will have no choice but to turn to public transport. And maybe we will get the occasional fare hikes that will help boost income.

However operating cost will rise, attributed to rising energy cost (electricity for their trains, diesel for their buses/taxis) and more staff for their upcoming circle line.

They recently posted a modest 11% rise in revenue and 8% rise in operating profit. Their main unsecured debt of SGD$250mil is repayable from 2009 onwards. Looking at the financial report, their balance sheet looks relatively alright at 50-50 equity/debt. They have ready cash, but the bulk of them are in fixed deposits.

Worth taking a look for their long term benefits however at a P/E of 18.4, their current share price is a bit too high for my liking.