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Shares of train operator SMRT Corp Ltd fell as much as 3 percent to a 29-month low, after it posted a sharp fall in quarterly earnings and reduced its final dividend, prompting several brokers to cut their ratings on the stock.
SMRT reported on Monday a 59 percent drop in fourth quarter net profit to S$13.9 million ($11.2 million), and declared a reduced final dividend of 5.70 Singapore cents compared with 6.75 cents a year ago.
SMRT shares fell 1.8 percent to S$1.65 with more than 1.1 million shares changing hands in early trade, compared to its average daily volume of 3.2 million shares over the last five sessions.
CIMB Research cut its target price for SMRT to S$1.50 from S$1.55 and maintained its underperform rating, citing higher operating expenses and a cut in dividend.
"Plagued by margin erosion and cash flow strains, we see no reason to own this stock. Further, dividend yields are no longer attractive," said CIMB in a report.
The broker added that SMRT's plans for asset renewal will result in higher capital expenditure, while mandates for more stringent repairs and maintenance will elevate its cost structure permanently, eating into profits.
JPMorgan downgraded SMRT to neutral from overweight and cut its target price to S$1.60 from S$2.00.
OCBC Investment Research also downgraded SMRT to hold from buy and lowered its target price to S$1.71 from S$2.04, citing weaker-than-expected earnings for 2012.
It estimated that SMRT's capital expenditure in 2013 will rise to S$500 million due to higher expenses needed for upgrading its assets.
For related statement click
0942 (0142 GMT)
(Reporting by Charmian Kok in Singapore; [email protected])
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08:44 STOCKS NEWS SINGAPORE-Index futures rise
Singapore index futures climbed 0.12 percent, indicating a positive start of the benchmark Straits Times Index .
Asian shares edged higher and the dollar recovered against the yen on Wednesday after strong U.S. factory activity data eased concerns about a loss of momentum in the world's biggest economy.
For related story click (Reporting by Charmian Kok in Singapore; Editing by Jacqueline Wong)
SMRT reported on Monday a 59 percent drop in fourth quarter net profit to S$13.9 million ($11.2 million), and declared a reduced final dividend of 5.70 Singapore cents compared with 6.75 cents a year ago.
SMRT shares fell 1.8 percent to S$1.65 with more than 1.1 million shares changing hands in early trade, compared to its average daily volume of 3.2 million shares over the last five sessions.
CIMB Research cut its target price for SMRT to S$1.50 from S$1.55 and maintained its underperform rating, citing higher operating expenses and a cut in dividend.
"Plagued by margin erosion and cash flow strains, we see no reason to own this stock. Further, dividend yields are no longer attractive," said CIMB in a report.
The broker added that SMRT's plans for asset renewal will result in higher capital expenditure, while mandates for more stringent repairs and maintenance will elevate its cost structure permanently, eating into profits.
JPMorgan downgraded SMRT to neutral from overweight and cut its target price to S$1.60 from S$2.00.
OCBC Investment Research also downgraded SMRT to hold from buy and lowered its target price to S$1.71 from S$2.04, citing weaker-than-expected earnings for 2012.
It estimated that SMRT's capital expenditure in 2013 will rise to S$500 million due to higher expenses needed for upgrading its assets.
For related statement click
0942 (0142 GMT)
(Reporting by Charmian Kok in Singapore; [email protected])
************************************************************
08:44 STOCKS NEWS SINGAPORE-Index futures rise
Singapore index futures climbed 0.12 percent, indicating a positive start of the benchmark Straits Times Index .
Asian shares edged higher and the dollar recovered against the yen on Wednesday after strong U.S. factory activity data eased concerns about a loss of momentum in the world's biggest economy.
For related story click (Reporting by Charmian Kok in Singapore; Editing by Jacqueline Wong)
