ComfortDelgro

ComfortDelgro: Post-results meeting noted a general optimism from management, while DB maintains their positive view on the sector and group. House has a Buy rating with $2.36 TP. Slight disappointment was expressed at the suggestion that operators contributed up to 50% of fare increases to the Public Transport Fund. But management reserved further comments pending more details from the authorities (which they expect in the coming weeks). DB estimates that the cumulative theoretical fare increase over 2012/13 could be up to c.8%. Assuming 50% of that increase is granted, this could imply c.2% annual fare increases over 2014/15 and would drive c.5% uplift to its 2014 NPAT for ComfortDelgro. Separately, overseas M&A will be pursued opportunistically, and DB note particular interest in Australia.