CGS-CIMB sees 'bumpy road to recovery' for SBS Transit

CGS-CIMB’s Ong Kang Chuen and Darren Ong have maintained their “add” call on SBS Transit, but with a reduced target price of $3.50, down from their previous figure of $3.60. 

The analysts note that the company posted a “strong set” of 1QFY2021 results, with net profit coming in at $23.3 million, which is 14% lower q-o-q, but a whopping 109% higher y-o-y. This is “in line” with their previous FY2021 forecast.

The duo also highlights that SBS’s topline was weaker than expected, coming in at 6.5% lower y-o-y, as it was “dragged by lower rail ridership and advertising revenue... but this was offset by stronger-than-expected cost control.”