ComfortDelgro

ComfortDelgro: 3Q14 net profit rose 5.3% to $80.8m, while revenue increased 6% to $1b, driven by growth from all business segments except Bus Station business. Positive foreign currency translation also boosted top line. Bottom line slowed by increased operating expenses. StanChart thinks upgrades are likely, especially when the Singapore bus reforms come about, which should turn the Bus ops from loss making and capex heavy to materially profitable and asset light. Oil is hedged at a cheap price. 70% of FY15 requirements and a small part of FY16 requirements hedged. The Trans-cab listing should not have material impact on CDG. Singapore taxi operators can only expand their fleet at 2% p.a. if they fulfill all of LTA’s taxi availability standards, which Transcab has recently failed to meet. On top of that CDG owns 60% of the market share, hence Trans-cab shouldn’t be a worry. On Trans-cab’s aim on venturing into transport businesses, including operating public busses, this seems unlikely as LTA would not want a bus operator with not experience. Latest broker ratings: StanChart maintains Outperform with TP of $3.35 Deutsche maintains Buy with TP of $2.85