SMRT Corp - RHB Invest 2015-11-30: Waiting For Rail Reforms To Be Unveiled

SMRT CORPORATION LTD S53.SI 

SMRT Corp (MRT SP) - Waiting For Rail Reforms To Be Unveiled 

• We think most negatives, ie higher rail maintenance costs and elevated rail infrastructure capex, are already priced in. 
• Upgrade SMRT to NEUTRAL (from Sell) and raise TP to SGD1.60 (from SGD1.10, 12% upside), aided by lower WACC and cash inflow from a FY17 bus assets sale. 
• We have not factored in rail reforms (by 2019 possibly). 
• A back-of-envelope calculation suggests a 37% rise to our current TP if reforms are implemented in FY19. 

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