ComfortDelGro hits the speed bumps

SINGAPORE (Sept 18): OCBC is downgrading ComfortDelGro to “hold” after its subsidiary lost the Thomson-East Coast Line contract and Grab turns aggressive in wooing its taxi drivers.

“Consequently, our FY17F-FY21F PATMI decreases by 3.1%-9.4%. And as we reduce our terminal growth from 2% to 1%, our fair value lowers from $2.70 to $2.12. We recommend accumulate at $2.00 or lower,” says analyst Eugene Chua in a Monday report.

LTA announced last Friday that it has awarded SMRT the contract to operate the Thomson-East Coast Line for an initial nine-year period, which will open in stages from 2019.

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