Brokers' take

ComfortDelGro Corp | Hold

Sept 7 close: S$2.79

Fair value: S$2.99

OCBC Investment Research, Sept 7

Singapore's Transport Minister announced on Aug 3 a potential reduction in bus and train fares by up to 1.9 per cent effective end-FY15 for a one-year period to reflect the lower energy costs. Certainly, the fare cut will have negative impact on ComfortDelGro's (CDG) near-term growth, at least in FY16, mainly through its ~75 per cent exposure in SBS Transit (that is, bus operations in Singapore) and as the operator for Downtown Line (DTL) in Singapore. However, the potential fare cut will have marginal impact on CDG as a group due to its diversified revenue generated across multiple geographical locations. Without any furth…