ComfortDelgro

ComfortDelgro: Nomura maintains a BUY rating, raises its TP to $2.19 based on 2014F earnings. Potential upside to its forecast and valuations would come from ComfortDelgro's active deployment of its cash hoard into acquisitions, as well as a fare increase. Nomura estimates every $50m worth of acquisitions will add ~2.4¢ to its TP (+1%). For fare increases, every 1¢ increase in fares will add ~8¢ to its TP (+4%). In the meantime, investors are paid to wait for the upside events to materialise as the stock offers a FY13/14F dividend yield of 3.5/3.7%. The stock trades at 15.3/14.3x FY13/14F P/E, which is in the middle of its three-year trading range (11-17x). Key risks include a loss of Australian bus contracts; higher-than-expected losses on DTL; regulatory changes; North-East Line breakdown; currency; higher oil price; higher staff cost.