Nomura Research in a Sept 22 research report says: "With the start-up of Stage 4 and 5 of the Circle Line (CCL) from Oct 8r, we expect ridership of the CCL line to continue to grow from the current 180,000 per day as the 12 new stations come onstream, but also expect losses to continue over the next two years given high start-up/commissioning and operating costs.
"We are estimating that the CCL will continue to post EBIT losses of $20 million for this year, shrinking to S$3mn for next year, with estimated ridership reaching 350,000 and 380,000 at end FY2012 and end FY2013F, respectively. We expect the CCL to contribute positively to EBIT ($8.7 million) in FY2015F, with ridership hitting 413,000 per day.
"Relatively demanding valuations with FY12/13F P/E at 20x and 17x, although the dividend yield of 4.8% remains attractive in our view. MAINTAIN NEUTRAL."
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