ComfortDelGro - DBS Research 2026-06-22: UK Public Transport Lower Risk Than Feared

• Our initial significant earnings downgrade for ComfortDelGro (SGX:C52) was driven by the very weak 1Q26 results and concerns about a repeat of 2022, when high UK inflation caused a sharp deterioration in the company’s UK public transport business. See report: ComfortDelGro: Intensifying Pressure On Point-To-Point Business and London Bus.

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Public transport

Slack labour conditions in the UK could lead to more moderate wage inflation than initially expected.

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• We are also seeing positive signs that the Strait of Hormuz could be reopened soon, which will likely put a lid on oil prices and inflation. Coupled with the UK labour market showing more slack, with unemployment at 5% in 1Q26 versus a low of 3.7% back in 3Q22, the major labour cost spike hit we had previously feared now seems unlikely.

• Management also indicated that it continues to secure new tenders at attractive double-digit margins, providing additional buffer against wage cost pressure.

• Accordingly, we raise our public transport core operating profit to S$149mil from S$138mil, as margin pressure is likely to be less severe than initially expected.

Taxi and private hire

Outlook remains challenging.

• Read more at SGinvestors.io.

Zheng Feng Chee DBS Group Research | https://www.dbs.com/insightsdirect/ 2026-06-22

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