ComfortDelgro – Phillip
• Bus ridership for April showed a slight growth of 3.4% y-y
• Rail ridership continues to grow strongly in April, 14.8% y-y
• Maintain Buy recommendation with a fair value estimate of S$1.73
Both bus and rail riderships grew in April
Both the bus and rail riderships grew in April by 3.4% and 14.8% y-y respectively; bus ridership saw a modest growth despite the opening of circle line. We believe that more Singaporeans are switching over to the public transport due to the increased connectivity and shorter travelling time during the morning peak hours,which bodes well for the 2 transport operators in Singapore.
Valuation and Recommendation
We are maintaining our Buy recommendation and fair value estimate of S$1.73, we believe that the UK’s business will turn in a better result for 2010 and Australia’s business will continue to show strong growth. The recent price correction of CDG has provided investors with a good opportunity to accumulate the stock.