We find Comfort Delgro’s (CD) risks / reward attractive on a 6-12 month horizon. Our view anchors on (i) improving SG mobility that should reflate rail farebox and taxi demand, (ii) arguably zero-cost call options on potential changes in Downtown Line’s contract structure and value crystallization of Australian assets, (iii) attractive 15x 2022E PER compared to 10-yr historical average of 17x and (iv) room for inorganic growth given its net cash position. We maintain our Buy rating with TP increased to S$1.88 (from S$1.8), based on 10-yr historical average of 17x PER, having rolled over valuation to 2022E. We trim 2021-22E core earnings estimates by 16% and 4% respectively to factor in lockdowns in 2021.
Kaseedit Choonnawat