SMRT can provide mail/parcel delivery/self pick up services too..
Just Singpost will be pissed!
(17-04-2015, 08:12 PM)Ben Wrote: [ -> ] (17-04-2015, 07:29 PM)LionFlyer Wrote: [ -> ]Hmm, in looking to move into the telco space, it seems to send the signal that the transport market might have reached the point where growth would be limited.
I do not think so that the transport industry in Spore is reaching its limit. IIFC, there are on going plans for the MRT network to be double in size by year 2030. Beside, with growing population, demands for transport service is definitely going to increase over time. The problem faced by PTO is that the industry is highly regulated. PTO has no power to increase fares on their own, and fares is a very sensitive topics, which means its increase over time will be fairly muted. So, it is the right thing to do to diversify into non-fare businesses. In the case of CDG, they expand overseas and is now the 2nd largest transport company in the world. SMRT is taking similar approach but into related industries instead of transport industry. So far yet to see significant impact from these investments but given enough time, I am confident that something good will show.
Ah, thanks for explaining my point I guess. When I meant limits, I wasn't referring to the physical infrastructure but more of the earning potential that can be derived from providing transport services. As you pointed out, the transport sector is increasingly more regulated. In the last few years, G seems to be taking a more active role due to rising service expectations from increasing competition (seeking alternative operators for bus routes) to looking at increasing service levels.
CIMB analyst view on the SMRT telco venture...
SMRT kept at ‘hold’ by CIMB with $1.80 target price
...
We like this collaboration between SMRT and OMG as it showcases how the transport operator strives to extract value from its extensive media presence and commuter reach (SMRT’s public rail and bus operations have a daily ridership of over three million),” said CIMB analysts Roy Chen and William Tng in a research note.
“Given the investment’s relatively small size and dependence on OMG winning the bid, we have not incorporated any fundamental impact on our FY2015 – 2017 EPS estimates at the current juncture,” they add.
“Potential re-rating catalysts include said investment materialising and the implementation of a new rail financing framework in the future.”
...
http://www.theedgemarkets.com/sg/article...rget-price
The RFF is the most critical for SMRT...
(not vested)
Land transport sector kept at ‘overweight’ by OCBC with SMRT as top pick
SINGAPORE (May 20): OCBC Investment Research is maintaining its “overweight” call on the land transport sector given its positive outlook based on two key medium to longer term catalysts.
“Our top pick is SMRT (buy; fair value; $1.85) and we think Comfortdelgro (hold; fair value; $3.07) is fairly priced now,” says OCBC.
In a report published May 20, OCBC says the transition to the new bus government contracting model (GCM) and the new rail financing framework (RFF) will benefit SMRT more than Comfortdelgro.
...
http://www.theedgemarkets.com/sg/article...t-top-pick
And just after the CEO spoke at today's AGM about how the train business is running operating losses. Talks with govt on new rail financing framework seem to be taking a long time too.
http://businesstimes.com.sg/transport/up...xtor=AL-18
"He said that the train business suffered an operating loss of S$2.4 million for the first time in the last quarter of fiscal 2015, as there has been no "commensurate increase in fare revenue to offset the rising operating costs brought about by higher headcount and depreciation because of network expansion, intensified repairs for an ageing fleet, and heightened regulatory and operating standards".
He said under a new rail financing framework, the government - instead of SMRT - should own all operating assets and the associated risks for major capital asset investments. These assets will be leased to SMRT over a shortened licence period, with a charge payable that will comprise fixed and variable components.
"The new framework is being constructed with an appropriate level of risk and reward sharing between the government and SMRT. It is a complex exercise with many implementation details to be worked out," he said in his speech, which was made available through the SGX website Tuesday evening.
"We are making progress in our ongoing discussions with the authorities, and will be able to share more when timely and appropriate."
smart need to focus on its retail mall business..rail services is secondary
We don't need asset managers... as we have plenty of them...
We don't need an expensive S$2m CEO talking empty...
We just need a $300k pa COO and CTO for public transport...
Expensive empty talkers are a waste of tax payers' resources and a huge obstacle to Nation's progress and image.
Disgrunted Commuter
Disgraced Shareholder
Odd Lots Vested