ComfortDelGro, a leading transport operator, is planning to bid for Melbourne’s metro system from 2027, a move that could significantly bolster its presence in Australia, RHB said.
This strategic expansion follows recent rail contract successes in Auckland, Paris, and Stockholm, highlighting the company’s focus on stable, regulated markets. The company has maintained a “buy” recommendation with a target price of S$1.75, reflecting a potential 24% upside and a yield of approximately 6%.
ComfortDelGro’s domestic operations have also seen a boost with Moove Media securing an exclusive advertising contract. However, RHB suggests that the immediate impact on earnings will be minimal. The company’s strategy is underpinned by expectations of mid-teens earnings growth and a dividend yield above the market average.
The expansion into Melbourne is part of ComfortDelGro’s broader strategy to leverage its expertise in public transport systems globally. “ComfortDelGro’s plan to bid for Melbourne’s metro system from 2027, if successful, is set to further strengthen its presence in Australia,” noted analyst Shekhar Jaiswal.
Looking ahead, ComfortDelGro’s growth prospects remain robust, driven by improvements in UK public transport margins and contributions from recent Australian bus tender wins. The company also anticipates positive developments in its China taxi business. As ComfortDelGro continues to expand its international footprint, its strategic moves in Australia and beyond are likely to play a crucial role in its future growth trajectory.
“`
