How ComfortDelGro's cost-plus model can buoy its bus business
It'll be a less bumpy road.
According to Nomura, overall, ComfortDelGro's management believes the Singapore bus business will turn for the better. The key premise behind that view is a belief that the government could potentially shift towards a cost-plus model.
This is viewed by management to be better for business due to the elimination of revenue risk. Management guided that EBIT margins under a costplus model would be in the mid-to-high single-digit range