ComfortDelGro Expected to Benefit from Singapore's Transport Fare Hike

Dow Jones10-05 10:07

0207 GMT - ComfortDelGro may benefit from Singapore's planned public transport fare increase of 7.0%, effective Dec. 26, RHB Research's Shekhar Jaiswal says in a research report. This is positive for rail operations of its subsidiary SBS Transit, with net revenue uplift for SBS Transit at around 18.8 million Singapore dollars, the analyst estimates. The incremental earnings contribution will mostly depend on energy costs in 2027, with the latest operating trends supporting a cautious view on earnings conversion. RHB sees the fare increase cushioning higher rail operating costs, rather than creating a new earnings catalyst for ComfortDelGro. It maintains the stock's buy rating and a target price of S$1.50. Shares are 0.8% lower at S$1.26.

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