Comfort Delgro

Comfort Delgro: First quarter results in line with street estimates, as net profit climbed 9.7% y/y to $63.3m, in tandem with revenue growth of 9.2% to $950.8m. The top line growth was broad-based across its major operating segments - bus (+13%), taxi (+7%) and automotive engineering services (+3%) businesses. Operationally, bus margin held steady at 8.2% (+0.4ppts), while operating margin of its taxi business fell 0.6ppts to 10.7% on a negative translation effect from the weaker AUD. Management maintained its guidance for a broad-based growth, although indicating that cost pressures will continue to be felt. Market observers believe that potential changes to the public transport policies may be made soon, as the Singapore parliament is scheduled to reconvene on 16 May. Any changes made to the current model would significantly skew earnings for both the public transport operators. Latest broker recommendations: Maybank-KE reiterate Buy with TP of $2.40 PhillipCapital maintains Accumulate with TP of $2.34 DB maintains Outperform with TP of $2.21 UBS maintains Neutral, raised TP to $2.09 (from $1.90)