Singapore Stock Market News
SMRT - Taxi Fare Revision
StockFanatic
Publish date: Tue, 13 Dec 2011, 11:35 AM
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SMRT announced that it would be revising its taxi fares to match the recent increase by ComfortDelgro. It cited the need to 'keep pace' with its competitor's increase in order to provide its cab drivers with the ability to cope with higher fuel costs and rising cost of living.
Fare revisions:
- Flag down rates will rise by 20 cents and 70 cents for most taxis and limousines, respectively
- Flag down rates for Chrysler cabs will remain unchanged at $5
- Meter fares for journeys up to 10km will be revised to 22 cents per 400m from the previous 20 cents per 385km
- City area and peak period surcharges will be extended
- The new fares will be implemented next Tuesday (20 Dec)
Given that the fare revision will only affect travelling costs for passengers and cab drivers' income, and the fact that SMRT has not yet announced any changes to its taxi hire-out/lease-out rates, we are leaving our FY12 earnings projections unchanged.
Maintaining target price, but upgrading to BUY
Since our last report issued on 31 Oct (See report), SMRT's share price has come off slightly together with broad market declines but we continue to like the counter for its dividend yield (4.4% FY12F vs. 3.7% FY12F for STI). In addition, with fuel costs hedges and growing Circle Line ridership, we see opportunities for SMRT's operating margins to improve.
Based on valuation grounds, we are upgrading our call on SMRT to BUY from HOLD previously, at an unchanged fair value estimate of S$2.04.
For more Analyst Reports, click here
Source : OCBC Research
For more Analyst Reports, click here
Source : OCBC Research
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