ComfortDelgro

ComfortDelgro: OCBC upgrade to buy and note that recent comments by the Transport Minister have compelled us to re-visit our conservative growth assumptions for ComfortDelgro (CD). With early indications pointing to a likely fare increase – and with the onset of the BSEP and its associated government subsidies – deem that a gradual turnaround for the bus segment will commence in FY13. Coupled with a favourable fuel outlook and intact growth catalysts from aboard and other key segments such as rail and taxi, house adjust evenue projections upwards and roll valuations forward to include FY14. Despite maintaining our 50% of PATMI dividend payout assumption, DDM-based valuation increase to $1.90 from $1.60 previously.