20140602-Maybank_KERPL-Reality_check__upgrade_to_HOLD_13页_544kb

报告摘要

SMRT (MRT SP) Summary

Core Content

SMRT is a Singapore-based transportation company with a current share price of SGD1.45 and a target price of SGD1.36, indicating a -6% adjustment. The company's market capitalization is USD1.8 billion, with an average daily trading volume of USD4 million. The stock is currently rated as HOLD by Maybank, with a revised target price based on a base case scenario.

Main Viewpoints

Operating Model Transition: The company is transitioning to a fare-independent, asset-light model, similar to the recent changes in the public bus industry. This model is expected to be more sustainable and beneficial for SMRT.
Scenario Analysis: The valuation of SMRT is highly sensitive to various factors, including the treatment of previous contractual agreements, rental concessions, and EBIT margins. Three scenarios are outlined:
- Bull Case: SMRT retains rental income and benefits from asset sales, leading to a target price of SGD2.09.
- Base Case: SMRT sells operating assets and retains rental concessions, resulting in a target price of SGD1.36.
- Bear Case: SMRT sells operating assets and uses the proceeds to offset contractual obligations, with a target price of SGD0.98.
Valuation Multiples: The market is expected to price SMRT at a premium P/E of 17x, reflecting the shift to a more sustainable and asset-light model.
Financial Metrics:
- Revenue is projected to grow from SGD1,119.5m in FY13A to SGD1,308.0m in FY16E.
- EBITDA is expected to vary, with a base case of SGD310.4m in FY15E and a bear case of SGD157m in FY15E.
- Core net profit is projected to decline significantly, from SGD100.6m in FY13A to SGD22.7m in FY17E.
- The company's core EPS is projected to decrease from 6.6cts in FY13A to 1.5cts in FY17E.
Balance Sheet: SMRT's property, plant & equipment are valued at SGD1,435.8m as of FYE Mar, with net debt/equity at 107.5% in FY15E.
Free Cash Flow: Free cash flow is projected to be negative in some scenarios, with a base case of SGD-372.2m and a bear case of SGD77.5m.
Dividend Yield: The net dividend yield is stable at 1.5% across the forecast period.

Key Information

Target Price: SGD1.36 (upgraded from SGD0.80).
Valuation Scenarios:
- Bull Case: Target Price = SGD2.09
- Base Case: Target Price = SGD1.36
- Bear Case: Target Price = SGD0.98
Valuation Basis: The analysis is based on the assumption that the company will transition to a sustainable and asset-light model, which may result in a higher P/E multiple.
Key Variables:
- Cash surplus from asset sales
- Treatment of previous contractual agreements
- Retention of rental concessions
Risks:
- An unfavourable rail transition
- LTA may not purchase assets at book value
- LTA may enforce existing agreements and not allow a transition to a fare-independent model
- Regulators may treat ancillary income streams separately

Financial Highlights

Metric	FY13A	FY14A	FY15E	FY16E	FY17E
Revenue (SGD m)	1,119.5	1,163.9	1,249.2	1,308.0	1,307.4
EBITDA (SGD m)	278.1	255.5	310.4	338.6	300.3
Core Net Profit (SGD m)	100.6	61.9	67.7	65.5	22.7
Core EPS (cts)	6.6	4.1	4.5	4.3	1.5
Core P/E (x)	21.9	35.6	32.6	33.7	97.1
P/BV (x)	2.9	2.8	2.6	2.5	2.6
Net Dividend Yield (%)	1.7	1.5	1.5	1.5	1.5
ROAE (%)	12.9	7.9	8.2	7.6	2.6
ROAA (%)	5.1	2.9	3.0	2.6	0.9
EV/EBITDA (x)	8.9	8.0	10.0	9.1	10.2
Net Debt/Equity (%)	8.2	60.0	107.5	99.7	98.8

Key Questions and Implications

Asset Sale Benefits: SMRT is expected to benefit from the sale of rail and bus operating assets at book value, which could generate a cash surplus.
Rail Transition Model: The company may adopt a fare-independent, asset-light model for rail, similar to the bus industry, which would allow for more sustainable operations.
Ancillary Income Streams: Rental concessions are likely to be considered in the new model, but there is a risk that these could be treated separately.

Summary of Valuation

Scenario Analysis: The company's valuation is highly sensitive to margin assumptions and asset sale outcomes.
Target Price: Based on the base case, the target price is raised to SGD1.36.
Valuation Multiples: The market is expected to apply a P/E multiple of 17x, reflecting the shift to a more sustainable model.
Key Risks: An unfavourable rail transition could negatively impact the valuation.

Research Contact

Derrick Heng
(65) 6432 1446
derrickheng@maybank-ke.com.sg
WONG Chew Hann, CA
Regional Head of Institutional Research
(603) 2297 8686
wchewh@maybank-ib.com
ONG Seng Yeow
Regional Head of Retail Research
(65) 6432 1453
ongsengyeow@maybank-ke.com.sg
Suhaimi ILIAS
Chief Economist
Singapore | Malaysia
(603) 22978682
suhaimi_ILias@maybank-ib.com
Luz LORENZO
Philippines
(63) 28498836
luz_lorenzo@maybank-atrke.com
Tim LEELAHAPHAN
Thailand
(662) 658 1420
tim.l@maybank-ke.co.th
Juniman
Chief Economist, BII
Indonesia
(62) 21 29228888 ext 29682
Juniman@bankbii.com
Josua PARDEDE
Economist / Industry Analyst, BII
Indonesia
(62) 21 29228888 ext 29695
JPardede@bankbii.com
NG Wee Siang
Head of Research, Singapore
(65) 6432 1467
ngweesiang@maybank-ke.com.sg
Jigar SHAH
Head of Research, India
(91) 22 6623 2601
jigar@maybank-ke.co.in
Wilianto IE
Head of Research, Indonesia
(62) 21 2557 1125
wilianto.ie@maybank-ke.co.id
Howard WONG
Head of Research, Hong Kong / China
(852) 2268 0648
howardwong@kimeng.com.hk
Jigar SHAH
Head of Research, India
(91) 22 6623 2601
jigar@maybank-ke.co.in
NG Wee Siang
Head of Research, Singapore
(65) 6432 1467
ngweesiang@maybank-ke.com.sg
Jigar SHAH
Head of Research, India
(91) 22 6623 2601
jigar@maybank-ke.co.in
Wilianto IE
Head of Research, Indonesia
(62) 21 2557 1125
wilianto.ie@maybank-ke.co.id
Howard WONG
Head of Research, Hong Kong / China
(852) 2268 0648
howardwong@kimeng.com.hk