We take trains almost daily. Whether in a good or bad economy, the nation still will continue to take trains.
SMRT seems like a perfect business, a resilient business against the ups and downs of the financial market. But fundamentally, for now, SMRT not as perfect as what it seems.
Ridership
Ridership is poised to increase, especially with the doubling of the train system by 2020 and also the increasing population in Singapore. SMRT will gain from the increase in riderships with an uptick in their revenue.
The Monster
The monster for SMRT is the regulations. SMRT, after all, like SBS Transit Ltd, is a regulated business.
But what separates this regulation from the rest is that SMRT fare is regulated.
Yikes.
This means what the Company intends to charge its customers, is regulated by the authorities.
In most businesses, when costs increases, they increase their price accordingly to keep their ...
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