RHB Bank Singapore's Shekhar Jaiswal has kept his "buy" call and $1.70 target price for ComfortDelGro C52 after it won the $750 million contract to operate the Jurong Region Line for a tentative 11 years.
The contract was awarded to a joint venture between CDG's separately listed subsidiary SBS Transit, and a regular partner, France-based RATP Dev.
The Jurong Regional Line is the 7th mass rapid transit line in Singapore and will open in phases from 2027.
ComfortDelGro and RATP Dev, the JV partner, had earlier jointly won the contract to operate a metro line in Paris.
The Jurong Regional Line joint venture will be majority-owned by SBS Transit but he expects earnings contribution to be small, points out Jaiswal.
"Still, this win may herald more global wins," he says. "We stay positive on CDG and expect earnings growth to sustain in the quarters ahead."
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"For the near term, we reiterate our positive view on CDG, as its strong earnings growth remains supported by the continued improvement in UK public transport margins, contributions from Australian bus tender wins, and the acquisition of Addison Lee in the UK," adds Jaiswal.
ComfortDelGro shares changed hands at $1.46 as at 9.45 am.
