20140218-Maybank_KERPL-Convergence_of_negative_events_13页_1mb

报告摘要

Land Transport Sector Summary

Core Content

The Land Transport sector has been downgraded to Underweight from Neutral due to several negative developments. The primary concerns include heightened regulatory pressure, increased repair and maintenance expenses, and a fare hike that was lower than expected.

Main Points

Regulatory Pressure: A new Bill passed on 17 Feb 2014 increases the maximum fine for rail disruptions to 10% of annual fare revenue, up from SGD1m. This could significantly impact the operators' profitability, especially for SMRT and SBS Transit (SBST), with estimated maximum fines of SGD63.2m and SGD14.8m respectively for a network-wide incident.
Maintenance Expenses: The shift from a "find and fix" to a "predict and prevent" maintenance approach is expected to increase spending. This is likely to exacerbate financial challenges, particularly for SMRT, which has already seen increased maintenance costs since 2011.
Fare Hike: The 3.2% increase in fares for 2014 is below the expected 5%. While this provides some relief, it is insufficient to offset the annual losses in fare-based businesses, particularly for SMRT, which faces a SGD32.1m annual loss.

Key Information

SMRT:
- Rating: Sell
- Target Price (TP): SGD0.60
- Upside: -41.7%
- P/E (2013E): 28.9
- P/E (2014E): 25.6
- P/E (2015E): 20.5
- P/BV (2013E): 2.0
- P/BV (2014E): 1.9
- P/BV (2015E): 1.8
- Dividend Yield (2013E): 1.9
- Dividend Yield (2014E): 1.9
- Dividend Yield (2015E): 1.9
ComfortDelGro (CDG):
- Rating: Buy
- Target Price (TP): SGD2.40
- Upside: 22.8%
- P/E (2013E): 15.8
- P/E (2014E): 14.9
- P/E (2015E): 13.9
- P/BV (2013E): 1.9
- P/BV (2014E): 1.8
- P/BV (2015E): 1.7
- Dividend Yield (2013E): 3.6
- Dividend Yield (2014E): 3.7
- Dividend Yield (2015E): 3.8

Why CDG is Less of a Concern

Despite the sector downgrade, CDG is still rated Buy due to the following reasons:

Low Exposure to Fare-Based Business: CDG's Singapore fare-based business accounts for only 7% of its market value.
Rail Segment Losses Due to Start-Up Costs: The losses in the rail segment are mainly due to the Downtown Line (DTL) start-up costs, not ongoing operations.
Potential Upside from Ancillary Income: There is potential for increased rental and advertising income once the DTL is fully operational in 2017.

Financial Highlights

SMRT:
- EBITDA (2013A): SGD278.1m
- EBITDA (2014E): SGD246.4m
- EBITDA (2015E): SGD287.7m
- EBIT (2013A): SGD127.5m
- EBIT (2014E): SGD75.1m
- EBIT (2015E): SGD95.2m
- Pretax Profit (2013A): SGD105.1m
- Pretax Profit (2014E): SGD65.3m
- Pretax Profit (2015E): SGD81.8m
- Reported Net Profit (2013A): SGD83.3m
- Reported Net Profit (2014E): SGD54.2m
- Reported Net Profit (2015E): SGD61.3m
ComfortDelGro:
- EBITDA (2012A): SGD735.3m
- EBITDA (2013A): SGD763.7m
- EBITDA (2014E): SGD800.9m
- EBIT (2012A): SGD412.3m
- EBIT (2013A): SGD426.3m
- EBIT (2014E): SGD459.3m
- Pretax Profit (2012A): SGD396.0m
- Pretax Profit (2013A): SGD414.3m
- Pretax Profit (2014E): SGD444.9m
- Reported Net Profit (2012A): SGD248.9m
- Reported Net Profit (2013A): SGD263.2m
- Reported Net Profit (2014E): SGD278.9m

Analyst

Derrick Heng
Phone: (65) 6432 1446
Email: derrickheng@maybank-ke.com.sg

Research Offices

Regional

WONG Chew Hann, CA
Regional Head of Institutional Research
Phone: (603) 2297 8686
Email: wchewh@maybank-ib.com
ONG Seng Yeow
Regional Head of Retail Research
Phone: (65) 6432 1453
Email: ongsengyeow@maybank-ke.com.sg
Alexander GARTHOFF
Institutional Product Manager
Phone: (852) 22680638
Email: alexgarthoff@kimeng.com.hk

Economics

Subaimi JILIAS
Chief Economist (Singapore & Malaysia)
Phone: (603) 2297 8682
Email: suhaimi_ilias@maybank-ib.com
Luz LORENZO
Philippines
Phone: (63) 2 8498836
Email: luz_lorenzo@maybank-atrke.com
Tim LEELAHAPHAN
Thailand
Phone: (662) 658 1420
Email: tim.l@maybank-ke.co.th
Juniman
Chief Economist, BII (Indonesia)
Phone: (62) 21 29228888 ext 29682
Email: Juniman@bankbji.com
Josua PARDEDE
Economist / Industry Analyst, BII (Indonesia)
Phone: (62) 21 29228888 ext 29695
Email: JPardede@bankbii.com

Malaysia

WONG Chew Hann, CA Head of Research
Phone: (603) 2297 8686
Email: wchewh@maybank-ib.com
Desmond CH'NG, ACA
Banking & Finance
Phone: (603) 2297 8680
Email: desmond.chng@maybank-ib.com
LIAW Thong Jung
Oil & Gas Regional
Phone: (603) 2297 8688
Email: tjliaw@maybank-ib.com
ONG Chee Ting, CA
Plantations - Regional
Phone: (603) 2297 8678
Email: ct.ong@maybank-ib.com
Mohsin AZIZ
Aviation - Regional - Petrochem
Phone: (603) 2297 8692
Email: mohshin.aziz@maybank-ib.com
YIN Shao Yang, CPA
Gaming - Regional Media
Phone: (603) 2297 8916
Email: samuel.y@maybank-ob.com
TAN Chi Wei, CFA
Power Telcos
Phone: (603) 2297 8690
Email: chiwei.t@maybank-ib.com
LEE Yen Ling
Property & REITs
Phone: (603) 2297 8691
Email: lee.yl@maybank-ib.com
CHAI Li Shin
Building Materials · Glove Producers
Phone: (603) 2297 8684
Email: lishin.c@maybank-ib.com
KANG Chun Ee
Plantation Construction & Infrastructure
Phone: (603) 2297 8675
Email: chunee@maybank-ib.com
Ivan YAP
Consumer
Phone: (603) 2297 8612
Email: ivan.yap@maybank-ob.com
LEE Cheng Hooi
Automotive Regional Chartist
Phone: (603) 2297 8694
Email: chenghooi.lee@maybank-ib.com
Tee Sze Chiah
Head of Retail Research
Phone: (603) 2297 6858
Email: szechjah.t@maybank-jb.com

Hong Kong / China

Howard WONG
Head of Research
Phone: (852) 22680648
Email: howardwong@kimeng.com.hk
Alexander LATZER
Oil & Gas Regional
Phone: (852) 22680638
Email: alexgarthoff@kimeng.com.hk

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