• ComfortDelGro’s (CD’s) 2Q18 results deemed in line with expectations, with 1H18 PATMI forming 49%/46% of our/consensus full-year forecast.
• It has made S$282m worth of acquisitions YTD, including an A$110m purchase of FCL Holdings (to complete by end-Sep), that will likely further boost earnings ahead.
• Recovery in taxi fleet growth to further underpin earnings growth ahead.
• Healthy balance sheet with S$220m net cash supports further M&A pursuits.
• Transfer of analyst coverage; we upgrade from Hold to ADD with a higher DCF-based Target Price of S$2.75, with FY18-20F EPS forecasts up 2.9-11.1% to factor in acquisitions.

Source: CGS-CIMB Research - 10 Aug 2018