SMRT Corp Ltd

SMRT Corp Ltd At the Terminus ... Income Statement Balance Sheet ... We consider qualitative factors like (but not limited to)...

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SMRT Corp Ltd At the Terminus 18 October 2016

SINGAPORE | TRANSPORT SERVICES | UPDATE   

Scheme of Arrangement has been sanctioned by the Court Last day of trading of SMRT Shares is today Shares to be subsequently delisted

What is the news? SMRT Corp Ltd (SMRT) announced that the Court has sanctioned the Scheme of Arrangement (Scheme) and the last day of trading of SMRT Shares is 18 October 2016. The Court sanction follows the Scheme Meeting in which minority Shareholders had voted in favour of the Scheme for Temasek to acquire all the remaining issued and paid-up ordinary Shares, through its wholly-owned subsidiary, Belford Investments Pte Ltd for S$1.68 per Share. Indicative Timetable for the Scheme SMRT has confirmed that the last day of trading of its Shares will be on 18 October 2016. Scheme Shareholders should note the updated indicative dates for the following events: Last day of trading of the Shares

: 18 October 2016

Date of suspension of the Shares

: 19 October 2016

Books Closure Date

: 21 October 2016, 5.00 p.m.

Expected Record Date

: 24 October 2016

Expected Effective Date

: 25 October 2016

Expected date for the payment of the Scheme Price

: By 1 November 2016

Expected date that the Scheme Shares will be transferred to the Offeror

: 1 November 2016

Expected date of the delisting of the Shares

: After payment of the Scheme Price

Ceasing coverage SGD 1.680 N/A SGD 1.680 N/A

LAST CLOSE PRICE FORECAST DIV TARGET PRICE TOTAL RETURN COMPANY DATA O/S SHA RES (M N) :

1,527

M A RKET CA P (USD mn / SGD mn) :

1849 / 2565

52 - WK HI/LO (SGD) :

1.68 / 1.32

3M A verage Daily T/O (mn) :

3.64

MAJOR SHAREHOLDER (%) TEM A SEK HOLDINGS P TE LTD

54.0%

PRICE PERFORMANCE (%) 1M T H 3 M T H

1Y R

COM P A NY

1.5

10.5

25.9

STI RETURN

(0.3)

(2.1)

(3.4)

PRICE VS. STI 1.80

1.60 1.40

Ceasing of coverage With the delisting of SMRT, we are ceasing coverage of the counter.

1.20 1.00 Oct-15

Jan-16 Apr-16 MRT SP EQUITY

Jul-16 Oct-16 FSSTI Index

So urce: B lo o mberg, P SR

KEY FINANCIALS Y / E M ar

Revenue (SGD mn) P A TM I, adj (SGD mn) EP S, adj. (Cents) P /E, adj. (x) B VP S (Cents) P /B (x) DP S (Cents) Div. Yield (%)

F Y 13

F Y 14

F Y 15

F Y 16

1,119

1,164

1,236

1,297

100.6

61.9

91.0

90.3

6.62

4.07

5.98

5.93

23.0 50.54

26.4 52.69

3.0 2.50

2.0 2.20

1.6

2.0

27.4 56.43

28.3 60.07

2.9 3.25

2.8 4.00

2.0

So urce: Co mpany Data, P SR est.

Richard Leow, CFTe, FRM

(+65 6212 1848)

[email protected]

Page | 1 | PHILLIP SECURITIES RESEARCH (SINGAPORE) MCI (P) 118/10/2015 Ref. No.: SG2016_0207

2.4

SMRT CORP LTD UPDATE

Financials Income Statement Y/E Mar, SGD mn

FY12

FY13

Revenue Other opera ti ng i ncome EBITDA Depreci a ti on & Amorti s a ti on EBIT Net Fi na nce (Expens e)/Inc Other i tems As s oci a tes & JVs Excepti ona l i tems Profit Before Tax Ta xa ti on Profit After Tax - Non-control l i ng i nteres t Net Income, reported Net Income, adj.

1,057 22.0 300 (130) 170 (4.5) 2.7 (21.7) 147 (27.0) 120 119.9 141.5

1,119 1,164 1,236 36.3 42.1 58.0 278 256 314 (151) (171) (193) 127 84 121 (4.8) (9.2) (10.9) (0.4) (0.4) 1.0 (17.3) 105 75 111 (21.9) (13.2) (20.4) 83 61 90 (0.1) (0.4) (0.5) 83.3 61.9 91.0 100.6 61.9 91.0

FY14

FY15

FY16 1,297 77.3 323 (204) 119 (11.3) 2.2 19.0 129 (21.1) 108 (1.0) 109.3 90.3

Balance Sheet Y/E Mar, SGD mn ASSETS

FY12

FY13

FY14

FY15

FY16

PPE Inta ngi bl es As s oci a tes & JVs Inves tments Others Total non-current assets Inventori es Accounts Recei va bl es Inves tments Ca s h Others Total current assets Total Assets

1,346 14 68 15 1,443 54 64 195 0.0 313 1,756

1,436 14 51 32 1,532 60 86 546 692 2,224

1,642 14 53 21 1,729 84 99 5.0 156 344 2,073

2,042 14 56 21 2,132 81 168 156 405 2,537

2,131 14 52 19 2,216 80 192 232 505 2,720

546 58 604 150 210 360 965

2 577 54 633 607 216 823 1,456

156 355 54 566 480 225 705 1,271

9 568 63 640 813 226 1,038 1,678

71 668 62 801 750 255 1,005 1,806

791

0.3 768

(0.1) 802

(0.6) 860

(1.7) 916

FY12

FY13

LIABILITIES

Y/E Mar

FY12

FY13

FY14

FY15

FY16

Short term l oa ns Accounts Pa ya bl es Others Total current liabilities Long term l oa ns Others Total non-current liabilities Total Liabilities

EPS, reported EPS, a dj. DPS BVPS

7.80 9.21 7.45 51.50

5.50 6.62 2.50 50.54

4.07 4.07 2.20 52.69

5.98 5.98 3.25 56.45

7.17 5.93 4.00 60.09

EQUITY Non-control l i ng i nteres t Shareholder Equity

FY12

FY13

FY14

FY15

FY16

Valuation Ratios

Per share data (Cents)

Cash Flow

Y/E Mar, SGD mn

CFO PBT 147 105 75 111 129 Adjus tments 175 193 187 198 196 WC cha nges 10.5 (18.9) (12.8) (10.0) 9.4 Ca s h genera ted from ops 332 279 249 298 335 Others (50) (19) (15) (21) (5) Cashflow from ops 282 260 234 277 330 CFI CAPEX, net (234) (248) (649) (461) (255) Di vd from a s s oci a tes & JVs 0.2 0.2 0.2 0.2 4.9 Others (0.0) (14.4) 6.5 4.9 0.1 Cashflow from investments (234) (262) (643) (456) (250) CFF Sha re i s s ua nce, net 0.41 0.57 0.05 Loa ns , net of repa yments (100) 460 29 189 5 Di vi dends (129) (109) (30) (41) (49) Others 0.1 2.5 18.9 30.5 40.9 Cashflow from financing (229) 353 17 178 (4) Net change in cash (181) 351 (391) (0) 76 Effects of excha nge ra tes (0.0) (0.1) 0.2 0.8 (0.2) CCE, end 195 546 156 156 232 Source: Compa ny, Phi l l i p Securi ti es Res ea rch (Si nga pore) Es ti ma tes

Y/E Mar P/E (X), a dj. P/B (X) EV/EBITDA (X), a dj. Di vi dend Yi el d (%) Growth & Margins (%) Growth Revenue EBITDA EBIT Net Income, a dj. Margins EBITDA ma rgi n EBIT ma rgi n Net Profi t Ma rgi n Key Ratios ROE (%) ROA (%) Net Debt or (Net Ca s h) Net Gea ri ng (X)

19.1 3.4 8.9 4.2%

FY14 26.4 2.0 8.3 2.0%

FY15

FY16

28.1 3.0 10.3 1.9%

28.3 2.8 9.7 2.4%

9.0% 5.9% 4.0% 6.2% -4.7% -7.3% -8.1% 22.9% -12.9% -25.1% -33.9% 43.4% -12.1% -28.9% -38.5% 47.0%

4.9% 2.9% -1.1% -0.8%

28.4% 24.8% 22.0% 25.4% 24.9% 16.1% 11.4% 7.2% 9.8% 9.2% 11.3% 7.4% 5.3% 7.3% 8.4% 17.8% 12.9% 8.4% 5.1% (45) Net Cash

*Forward multiples & yields based on current market price; historical multiples & yields based on historical market price.

Page | 2 | PHILLIP SECURITIES RESEARCH (SINGAPORE)

23.0 3.0 8.5 1.6%

63 0.08

7.9% 11.0% 10.2% 2.9% 3.9% 3.4% 481 0.60

665 0.77

589 0.64

SMRT CORP LTD UPDATE

Ratings History Market Price Target Price

2.00

Source: Bl oomberg, PSR

1.80

1.60 1.40 1.20 1.00

Mar-17

Dec-16

Sep-16

Jun-16

Mar-16

Dec-15

Sep-15

Jun-15

Mar-15

Dec-14

Sep-14

1 2 3 4 5 PSR Rating System Total Returns Recommendation Rating > +20% Buy 1 +5% to +20% Accumul a te 2 -5% to +5% Neutra l 3 -5% to -20% Reduce 4 < -20% Sel l 5 Remarks We do not ba s e our recommenda tions entirel y on the a bove qua ntitative return ba nds . We cons i der qua l i tative fa ctors l i ke (but not l i mi ted to) a s tock's ri s k rewa rd profi l e, ma rket s entiment, recent ra te of s ha re pri ce a ppreci a tion, pres ence or a bs ence of s tock pri ce ca tal ys ts , a nd s pecul a tive undertones s urroundi ng the s tock, before ma ki ng our fi na l recommenda tion

Page | 3 | PHILLIP SECURITIES RESEARCH (SINGAPORE)

SMRT CORP LTD UPDATE

Contact Information (Singapore Research Team) Research Operations Officer Mohamed Amiruddin - [email protected] Consumer | Healthcare Soh Lin Sin - [email protected]

Property | Infrastructure Peter Ng - [email protected]

Macro Pei Sai Teng - [email protected]

Transport | REITs (Industrial) Richard Leow, CFTe, FRM [email protected]

REITs (Commercial, Retail, Healthcare) | Property Dehong Tan - [email protected]

Technical Analysis Jeremy Ng - [email protected]

Banking and Finance Jeremy Teong - [email protected]

US Equity Ho Kang Wei - [email protected]

Oil & Gas | Energy Chen Guangzhi - [email protected]

Contact Information (Regional Member Companies) MALAYSIA Phillip Capital Management Sdn Bhd B-3-6 Block B Level 3 Megan Avenue II, No. 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur Tel +603 2162 8841 Fax +603 2166 5099 Website: www.poems.com.my

HONG KONG Phillip Securities (HK) Ltd 11/F United Centre 95 Queensway Hong Kong Tel +852 2277 6600 Fax +852 2868 5307 Websites: www.phillip.com.hk

JAPAN Phillip Securities Japan, Ltd. 4-2 Nihonbashi Kabuto-cho Chuo-ku, Tokyo 103-0026 Tel +81-3 3666 2101 Fax +81-3 3666 6090 Website: www.phillip.co.jp

INDONESIA PT Phillip Securities Indonesia ANZ Tower Level 23B, Jl Jend Sudirman Kav 33A Jakarta 10220 – Indonesia Tel +62-21 5790 0800 Fax +62-21 5790 0809 Website: www.phillip.co.id

CHINA Phillip Financial Advisory (Shanghai) Co Ltd No 550 Yan An East Road, Ocean Tower Unit 2318, Postal code 200001 Tel +86-21 5169 9200 Fax +86-21 6351 2940 Website: www.phillip.com.cn

THAILAND Phillip Securities (Thailand) Public Co. Ltd 15th Floor, Vorawat Building, 849 Silom Road, Silom, Bangrak, Bangkok 10500 Thailand Tel +66-2 6351700 / 22680999 Fax +66-2 22680921 Website www.phillip.co.th

FRANCE King & Shaxson Capital Limited 3rd Floor, 35 Rue de la Bienfaisance 75008 Paris France Tel +33-1 45633100 Fax +33-1 45636017 Website: www.kingandshaxson.com

UNITED KINGDOM King & Shaxson Capital Limited 6th Floor, Candlewick House, 120 Cannon Street, London, EC4N 6AS Tel +44-20 7426 5950 Fax +44-20 7626 1757 Website: www.kingandshaxson.com

UNITED STATES Phillip Futures Inc 141 W Jackson Blvd Ste 3050 The Chicago Board of Trade Building Chicago, IL 60604 USA Tel +1-312 356 9000 Fax +1-312 356 9005 Website: www.phillipusa.com

AUSTRALIA Phillip Capital Limited Level 12, 15 William Street, Melbourne, Victoria 3000, Australia Tel +61-03 9629 8288 Fax +61-03 9629 8882 Website: www.phillipcapital.com.au

SRI LANKA Asha Phillip Securities Limited 2nd Floor, Lakshmans Building, No. 321, Galle Road, Colombo 03, Sri Lanka Tel: (94) 11 2429 100 Fax: (94) 11 2429 199 Website: www.ashaphillip.net

TURKEY PhillipCapital Menkul Degerler Dr. Cemil Bengü Cad. Hak Is Merkezi No. 2 Kat. 6A Caglayan 34403 Istanbul, Turkey Tel: 0212 296 84 84 Fax: 0212 233 69 29 Website: www.phillipcapital.com.tr

DUBAI Phillip Futures DMCC Member of the Dubai Gold and Commodities Exchange (DGCX) Unit No 601, Plot No 58, White Crown Bldg, Sheikh Zayed Road, P.O.Box 212291 Dubai-UAE Tel: +971-4-3325052 / Fax: + 971-4-3328895

SINGAPORE Phillip Securities Pte Ltd Raffles City Tower 250, North Bridge Road #06-00 Singapore 179101 Tel +65 6533 6001 Fax +65 6535 6631 Website: www.poems.com.sg

INDIA PhillipCapital (India) Private Limited No.1, 18th Floor, Urmi Estate 95, Ganpatrao Kadam Marg Lower Parel West, Mumbai 400-013 Maharashtra, India Tel: +91-22-2300 2999 / Fax: +91-22-2300 2969 Website: www.phillipcapital.in CAMBODIA Phillip Bank Plc Ground Floor of B-Office Centre,#61-64, Norodom Blvd Corner Street 306,Sangkat Boeung Keng Kang 1, Khan Chamkamorn, Phnom Penh, Cambodia Tel: 855 (0) 7796 6151/855 (0) 1620 0769 Website: www.phillipbank.com.kh

Page | 4 | PHILLIP SECURITIES RESEARCH (SINGAPORE)

SMRT CORP LTD UPDATE

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