Upside priced in…
Trading at a lofty 23x PER and 2.8% yield, we believe CDG has priced in upside from the impending transition at its Singapore bus business. It is also trading at a hefty 60% premium to the market (vs 3% premium since end-2008). CDG’s stub value (stripping out SBST and VICOM) has also surged despite no material positives for the rest of its business. It even outperformed SBST since end-2013.
Downside risks. Lowering TP to SGD2.70. D/G SELL
We lower our FY15-17E EPS by 0.9%/4.7%/7.4% and roll forward to 17x FY16E EPS (0.5SD above its 10-year average). We lower our TP to SGD2.70 (from SGD2.90) and downgrade to SELL from HOLD. (Read Report)
Source : Maybank Kim Eng Research