Ridership was resilient, rental revenue grew 12%. Average daily ridership for trains remained resilient, increasing by 4.8% yoy and 3.7% qoq to 1,431k/day. Average ridership for bus, however, dipped marginally (-1.1% yoy, -2.9% qoq) to 773.3k/day. Rental revenue drove topline, increasing 12% yoy to S$15.5m. Total lettable space increased to 28.799sqm (+9.7% yoy) due to the upgrading at 2 stations. Circle Line 3 ridership was at c.30k/day and not expected to be material till the full line opens around 2011.
Healthy balance sheet, net cash position. It will repay its current interest-bearing borrowings totaling S$150m in Dec＊09 (S$100m) and Jan'10 (S$50m).
Shenzhen Zona immaterial contribution. The proposed investment in Shenzhen Zona (RMB320m or S$68.4m) for a 49% stake should be completed in the next few months, but is not expected to have material contribution to the Group's bottomline. We estimate the contribution to be about 3-5% of the Group's net profit in FY11F.
Stable operations expected. Despite the downturn, MRT ridership remained resilient and tracks our full year assumption for 3% growth in FY10F. We maintain our Hold recommendation with a TP of S$1.65 based on 14x FY10F PE.
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