Thursday, 14 August 2014


UobKayhian on 14 Aug 2014

FY14F PE (x): 19.4
FY15F PE (x): 18.3
1H14 net profit of S$139m (+10% yoy) was in line with expectations. We see potential
further upside from a restructuring of the railway asset model and accretion from its
M&A. Growth prospects are moderate but cashflow generation is high.
A core holding in land transport. Maintain BUY on CD with a DCF-based target price of
S$2.83 (previously S$2.30). The increase is to reflect a terminal growth of 3%
compared with our previous assumption of 1%. At our target price, the implied 2015F
PE of 20.2x is close to its +1SD P valuation but we believe this is deserved given its
strong earnings track record and cashflow.

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