Cuts expected to leave Comfortdelgro unscathed

SINGAPORE (Oct 31): OCBC research is maintaining a “buy” call on ComfortDelgro with a fair value of $3.09 despite news of an impending fare cut.

The announcement by the Public Transport Council of Singapore to cut transport fares by 4.2% from Dec 30 should leave ComfortDelgro earnings relatively unscathed, notes lead analyst Eugene Chua in a Friday report.

ComfortDelgro’s bus business is already under the new government contracting model, notes Chua, where the revenue risk falls on the Land Transport Authority, leaving its bus revenue unaffected.

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