ComfortDelgro kept at ‘buy’ by DBS with $3.23 target

SINGAPORE (May 13): DBS Vickers Securities is maintaining its “buy” call on ComfortDelgro on margin expansion from lower fuel prices and the transition to the asset-light Government Bus Contract model.

“With lower capex needs, we believe there are upside for management to progressively increase its dividend payout,” says analyst Andy Sim in a Friday report.

1Q16 net profit grew 8.6% to $73.4 million from a year ago, on the back of 3.3% growth in revenue to $996 million. While the numbers were marginally behind DBS’s expectations, the effects were largely due to translation effects of GBP and AUD. The impact on operating profits was estimated to be about 1.3%.

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