ComfortDelgro: CIMB hosted an NDR, key takeaways: 1) Comfort views the bidding outcome of the first bus package positively, as a winning bid implies a reasonable margin which will set reference point for future bus packages. 2) Development of DTL stage 2 and 3 is on track, and DTL stage 2 is expected to commence operations in 1Q16 while stage 3 should commence ops in 1Q17. And 3) they would continue to pursue overseas growth via M&A. They target bottom line contribution of above 60% from the current below 50%.
The house sees many catalysts that could drive earnings over the next 2-3 years. In particular, value accretive M&As haven’t seemed to be priced in.
CIMB has an Add call on ComfortDelgro with a TP of $3.42
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