SMRT

[shanrui_91]

Personally, I don't think all that happen to SMRT is a coincidence. If you think about it, I get the feeling that they are trying to depress the share price.

1 week before announcement of result , they announced the $900m programme without specifying how much LTA will be co-sponsoring. Next their profit drops, dividend cut and they take an impairment of goodwill.

If you are SMRT management, will you announce a $900million plan 1 week before the release of a very lousy result? You could have delayed annoucing it, and at least wait till the % sharing with LTA is confirmed. What's more of the $900m, $200m has been announced much earlier.

Then for their results, they take a full impairment of goodwill which I don't see the reason why they should, unless the bus is going to result in losses for the next 5 years. No one is forcing them to take an impairment of goodwill. Then they still announced a cut in dividend which drastically affected the intrinsic value for those that use a dividend model.

And if you read the newspaper today "Work under way to make MRT system more reliable" , Lui actually says:

"details are being worked out, but broadly, the cost of infrastructural works - such as replacing rail sleepers - will be borne by the LTA". Resleepering is likely to be the major cost of the $900m apart from the signalling system, since resleepering is a project to be carried out until 2019. The $900m is likely to be $600m and below as Lui mentions that infrastructure work will be carried out by LTA.

This is just my personal opinion and speculation, everything can really just be a coincidence. Perhaps SMRT has a management that is not afraid of short-term share price ahead of its AGM

No need to speculate, many cos., be it local or US, that get into trouble, CEO gets replaced,... you'll see the same thing happening.

The new CEO (even if interim and was part of the old mgmt) would take this opportunity to lower the baseline. Whether real or perceived, all the write-off, write-down, huge CAPEX required,.. no one will really blame the NEW mgmt - the mess was after all created by the OLD mgmt! Even if share price were to drop, who to blame? OLD mgmt!

With a lower baseline, it'd be easier for the new mgmt to 'turn' the company around. It'd also be easier for them to 'grow' the bottomline from here on. The share price will of course rise from the dust when it finally settles and guess what? The NEW mgmt will be the hero!

The next step, perhaps, would be to do some organisation restructure + cleansing...

you just enlighten me, I cannot figure the reason for taking a big bath earlier on. I just don't see why the management is actually doing a full impairment on the bus operation. Now i get it, but too bad the price is still very high