Hot Stock: SMRT gains nearly 6% in early session
SMRT Corp gains 8.5 Singapore cents or nearly 6 per cent to S$1.57 in the early session.
The firm announced last Friday an impressive set of results for second quarter ended September - net profit jumped 76 per cent to S$25.3 million on the back of a 6 per cent rise in revenue to S$314.0 million from a year ago.
The improved results were led by better performance in its train and bus operations, as well as higher profitability from its taxi, rental and advertising businesses.
OCBC Investment Research has upgraded the counter to a "buy" as the research house believes that the current level of earnings is sustainable if management continues to maintain profitability in its fare business.
For the period under review, SMRT's fare business turned profitable from operating losses of S$6.8 million and S$1.1 million in the second quarter of FY2014 and the first quarter of FY2015 respectively to an operating profit of S$5.5m in the second quarter.
There are other positives.
"With the recent oil price slide, we expect further improvements to SMRT's bus and rail operating margins since electricity and diesel costs constitute an average of 16 per cent of total expenses," said OCBC.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Capital Markets & Currencies
Singapore stocks climb at Wednesday’s open; STI up 0.4%
Stocks to watch: MPACT, CapitaLand Ascott Trust, Hotel Properties, OUE Reit, CLCT
Europe: Tech, retail stocks boost Stoxx 600 to one-week high
US: Stocks climb for second straight day
Euro at highest to yen since 2008, markets nervy over Tokyo stepping in
Singapore stocks track Wall Street gains on Tuesday; STI up 1.5%