So I really get this question a lot on all channels: Given the negative sentiments with the issues faced by SMRT, do you think it is a good time to invest in SMRT?
I think its one stock most people classify as pillow stock because SMRT will always be around.
Rather than do an in-depth analysis I will try to reason it through a few angles.
Business Model
So here is how I see it:
- Regulated prices earning more than fuel costs, staff costs and necessary asset purchases
- When fuel cost is always a going concern, and asset purchase will have to go up to improve quality of services, total costs will have to rise
- Prices may not readily go up due to public sentiments so it means that margins will be squeeze
- Retail earns SMRT 70++% margins versus 20+% transport margins. Do you see the additional of circle line ...
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