SMRT

[CY09]

I seriously doubt the cost-plus model will bring it to a 10+ cent EPS. My personal opinion is that the govt will try to ensure SMRT achieves an annual ROE of approx. 10% under the new model. This would indicate EPS to be approx. 5-7 cents per year with shareholders getting a 50% payout.

The new model will have to ensure the delivery of shareholder value is matched with ensuring a quality transportation that Singaporeans expect (good transport service and low fares).

The business of SMRT is relatively easy to control since approx. 99% of its revenue comes from Singapore