31-03-2013, 11:38 PM
I thought the risk to smrt might be delisting? If its done at average price, then investors might not get good returns. This risk will increase if opp parties gain more seats.
(31-03-2013, 11:38 PM)Bibi Wrote: [ -> ]I thought the risk to smrt might be delisting? If its done at average price, then investors might not get good returns. This risk will increase if opp parties gain more seats.
(30-03-2013, 08:13 PM)CityFarmer Wrote: [ -> ](30-03-2013, 10:11 AM)specuvestor Wrote: [ -> ]^^ firstly they were making tons of money AFTER taking into account depreciation
Well, if ROA of 10% means tons of money, then lots of other companies are also making more than tons of money
PPM of SMRT are operating asset, means its value drop with age. Depreciation is a real expense and should be accounted.
(31-03-2013, 11:38 PM)Bibi Wrote: [ -> ]I thought the risk to smrt might be delisting? If its done at average price, then investors might not get good returns. This risk will increase if opp parties gain more seats.
(01-04-2013, 02:20 PM)specuvestor Wrote: [ -> ]Actually 10% is nothing to sneeze at. Not many companies in the Industrial or transport sector have that kind of ROA on a CONSISTENT basis. In fact if your portfolio does 10% CAGR, you would double your money in 7 years, not exactly shabby. Probably also why Buffett also like to use 10% coupon for his preference share plays.
These are ROA extracted from Bloomberg:
SMRT(SPORE) MRTC(HK) CD
2003 4.08 4.37 5.08
2004 5.60 6.26 7.3
2005 8.59 7.67 6.9
2006 7.53 6.63 7.96
2007 9.80 11.00 6.97
2008 10.65 5.26 5.98
2009 11.07 5.74 5.89
2010 10.56 6.73 5.40
2011 10.10 7.75 5.25
2012 7.13 6.69 5.28
So we can objectively see the "tonnes of money" before the current backlash from the public, and yet still higher than pre 2004.
And yes depreciation is part of operating expense of the company and shareholders should pay for. I don't see the logic of why public should pay for their operating expense, nor pay for wall street banks' bad debts.
(01-04-2013, 02:20 PM)specuvestor Wrote: [ -> ]Well put as usual. In china, even Tsingtao beer is subsidized. Not to mentioned their railway. In Singapore squeeze as much as the people can take? No?(30-03-2013, 08:13 PM)CityFarmer Wrote: [ -> ](30-03-2013, 10:11 AM)specuvestor Wrote: [ -> ]^^ firstly they were making tons of money AFTER taking into account depreciation
Well, if ROA of 10% means tons of money, then lots of other companies are also making more than tons of money
PPM of SMRT are operating asset, means its value drop with age. Depreciation is a real expense and should be accounted.
Actually 10% is nothing to sneeze at. Not many companies in the Industrial or transport sector have that kind of ROA on a CONSISTENT basis. In fact if your portfolio does 10% CAGR, you would double your money in 7 years, not exactly shabby. Probably also why Buffett also like to use 10% coupon for his preference share plays.
These are ROA extracted from Bloomberg:
SMRT(SPORE) MRTC(HK) CD
2003 4.08 4.37 5.08
2004 5.60 6.26 7.3
2005 8.59 7.67 6.9
2006 7.53 6.63 7.96
2007 9.80 11.00 6.97
2008 10.65 5.26 5.98
2009 11.07 5.74 5.89
2010 10.56 6.73 5.40
2011 10.10 7.75 5.25
2012 7.13 6.69 5.28
So we can objectively see the "tonnes of money" before the current backlash from the public, and yet still higher than pre 2004.
And yes depreciation is part of operating expense of the company and shareholders should pay for. I don't see the logic of why public should pay for their operating expense, nor pay for wall street banks' bad debts.
(31-03-2013, 11:38 PM)Bibi Wrote: [ -> ]I thought the risk to smrt might be delisting? If its done at average price, then investors might not get good returns. This risk will increase if opp parties gain more seats.
Yes the risk with SMRT is political. As with all public goods, mixing them with private interests is inherently a bad idea because the 2 objectives are at odds. Under the Goh era of Singapore Inc ideology, it became a good investment. But with government turning back to more socialist measures, it may not be a good idea.
Nonetheless IMHO public services should never be listed in the first place, including regulator like SGX.
(01-04-2013, 03:50 PM)CityFarmer Wrote: [ -> ](01-04-2013, 02:20 PM)specuvestor Wrote: [ -> ]Actually 10% is nothing to sneeze at. Not many companies in the Industrial or transport sector have that kind of ROA on a CONSISTENT basis. In fact if your portfolio does 10% CAGR, you would double your money in 7 years, not exactly shabby. Probably also why Buffett also like to use 10% coupon for his preference share plays.
These are ROA extracted from Bloomberg:
SMRT(SPORE) MRTC(HK) CD
2003 4.08 4.37 5.08
2004 5.60 6.26 7.3
2005 8.59 7.67 6.9
2006 7.53 6.63 7.96
2007 9.80 11.00 6.97
2008 10.65 5.26 5.98
2009 11.07 5.74 5.89
2010 10.56 6.73 5.40
2011 10.10 7.75 5.25
2012 7.13 6.69 5.28
So we can objectively see the "tonnes of money" before the current backlash from the public, and yet still higher than pre 2004.
And yes depreciation is part of operating expense of the company and shareholders should pay for. I don't see the logic of why public should pay for their operating expense, nor pay for wall street banks' bad debts.
Yes, ROA of 10% is respectable, but not qualify for "tons of money" IMO. A simple stock search for SGX with ROA of 10%, gives a total of 138 listed companies, although i have to admit that i am not able to search with criteria of sustainable 5 years ROA.
The logic of co-funding of assets for public transport are at least the followings IMO
- to allow bus operator continue to operate non-profitable routes in remote locations or new estates.
- to allow train operator provides service to losing route in early stage e.g. CCL at early stage.
(01-04-2013, 04:29 PM)specuvestor Wrote: [ -> ]In 2009 SMRT has $163m net income and $343m EBITDA, that's the ton I'm talking about since it is about half of COE income for the govt.
(01-04-2013, 04:29 PM)specuvestor Wrote: [ -> ]Yeah there are many lumpy ROAs especially for those in the EPC type of business. Maybe you can list out some that looks remotely stable business ie Buffett type of business and we can look deeper, for my benefit also Even SIA which is recognised as the star in the airline business which is 1) highly supported by the govt and 2) highly commercial, only has ROA of 8.63% in 2007 and 0.91% in 2010
(01-04-2013, 05:13 PM)CityFarmer Wrote: [ -> ](01-04-2013, 04:29 PM)specuvestor Wrote: [ -> ]In 2009 SMRT has $163m net income and $343m EBITDA, that's the ton I'm talking about since it is about half of COE income for the govt.
Well, it is a matter of definition and opinion. IMO, Genting's yearly profit in billion dollar started from the very 1st year operation is ton of money
(01-04-2013, 04:29 PM)specuvestor Wrote: [ -> ]Yeah there are many lumpy ROAs especially for those in the EPC type of business. Maybe you can list out some that looks remotely stable business ie Buffett type of business and we can look deeper, for my benefit also Even SIA which is recognised as the star in the airline business which is 1) highly supported by the govt and 2) highly commercial, only has ROA of 8.63% in 2007 and 0.91% in 2010
I looked into the list, and do a quick job just extracting out few which are familiar names here
- DairyFarm
- Boustead
- VICOM
There are all with ROA around or more than 10% for 5 years.