Shares of SMRT Corp Ltd fell to a five-month low after the Singapore transport operator reported a 31 percent fall in third-quarter net profit and brokers warned that its earnings could be dragged further by higher expenses.
SMRT shares dipped as much as 2.4 percent to S$1.635, the lowest since late August last year. Nearly 3 million shares changed hands, 2.6 times the average full-day volume over the past 30 days.
SMRT reported on Tuesday net profit of S$25.5 million ($20.7 million) for the three months ended December, down from S$37 million a year earlier, mainly hurt by higher staff, repair and maintenance costs.
DBS Vickers expects SMRT's earnings to worsen and cut its earnings estimates by 16 percent for the company's 2013 fiscal year and by 25 percent for 2014. DBS reduced its target price to S$1.30 from S$1.50 and kept its 'fully valued' rating.
DMG & Partners Securities said SMRT does not appear attractive as the stock was trading at a 2013 price-earnings ratio of 21 times, versus 15.9 times for its peer ComfortDelGro Corp Ltd.
"We think SMRT's share price faces limited upside with concerns on cost pressures," the broker said, cutting its target price on SMRT stock to S$1.55 from S$1.60 and maintaining 'neutral'.
(Reporting by Eveline Danubrata and Teo Jion Chun; Editing by Jijo Jacob; email@example.com; +65 6403 5669; Reuters Messaging: firstname.lastname@example.org
10:11 STOCKS NEWS SINGAPORE-ThaiBev hits record as Fraser and Neave eyed
Shares of Thai Beverage PCL jumped to a record high as the company's chairman, Thai billionaire Charoen Sirivadhanabhakdi, is inching closer to taking over Singapore property and drinks group Fraser and Neave Ltd.
Thai Beverage shares rose as much as 7.1 percent to S$0.53, with more than 57 million shares traded, 2.3 times the average full-day volume over the past 30 days.
Charoen is set to gain control of F&N after amassing a 46.4 percent stake through TCC Assets Ltd and Thai Beverage since July last year.
His offer for F&N shares that he does not already own, which values the Singapore conglomerate at S$13.75 billion ($11.2 billion), will turn unconditional if the Thais secure a stake of more than 50 percent.
Analysts say Charoen is likely to tap F&N's network in Singapore and Malaysia to distribute Chang Beer, brewed by Thai Beverage, as well as spirits, energy drinks and instant coffee. In Thailand, where he already has an edge, Charoen may in turn market F&N's brands.