DMG & Partners 20 March 2013
THE news: 20 LRT passengers got out of an LRT train carriage to walk on the tracks on Tuesday. The carriage stalled at 4.30pm and resumed at 5pm. SBS Transit runs LRT services in Sengkang and Punggol, and mentioned that investigations are going on to determine the cause of the fault.
Our thoughts: This disruption is not expected to have any material impact on ComfortDelGro's (which owns a 75 per cent stake in SBS Transit) earnings. The local land transport industry continues to be plagued by cost pressures from higher wages and repair and maintenance costs and we continue to favour ComfortDelGro ("buy", TP S$2.10) over peer SMRT for the former's 46 per cent overseas Ebit exposure and cheaper valuations.
BUY
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