Singapore-listed transport companies like ComfortDelGro (CDG) and SBS Transit, a CDG subsidiary, will likely benefit from some of the initiatives mentioned at Budget 2025, say analysts.
One of the initiatives stated by Prime Minister and Minister for Finance Lawrence Wong includes the government’s plan to invest over $60 billion on Singapore’s rail network within the decade so that at least eight in 10 households can be within a 10-minute walk to a train station.
Currently, Singaporeans can look forward to several new lines that have already been planned: the new Jurong Region Line, the Cross Island Line as well as extensions of the existing Thomson-East Coast Line (TEL), Downtown Line (DTL) and the Circle Line (CCL).
“We will continue to study how our rail network can be expanded,” Wong said on Feb 14.
In addition, the government is investing close to an additional $1 billion to increase and enhance Singapore’s bus services under the Bus Connectivity Enhancement Programme.
Naturally, the announcements will be positive for SBS Transit, which is the largest public bus operator in Singapore, notes RHB Bank Singapore analyst Shekhar Jaiswal.
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SBS also operates two MRT lines, the North-East Line (NEL) and DTL, and the Sengkang-Punggol LRT, and has a joint venture (JV) with RATP Dev Asia Pacific to operate the upcoming Jurong Region Line, Jaiswal adds. RATP Dev Asia Pacific is a subsidiary of global firm RATP Dev.
RHB has a “buy” call on CDG with a target price of $1.70 while it doesn’t have a rating for SBS.
Macquarie Equity Research analysts Jayden Vantarakis, Gilbert Lopez, Foo Zhiwei and Rachel Tan also see that the government’s consideration to expand rail lines would present more tender opportunities for incumbents like CDG and SMRT, which was privatised in 2016.
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Maybank Securities analyst Eric Ong believes the focus on increasing the use of public transport is “slightly positive” on CDG as he sees the company enjoying higher ridership growth moving forward. “That said, we are unable to quantify the exact impact on earnings for now,” he says.
Electric vehicles
CDG, which provides electric vehicle (EV) charging services, is also tipped to benefit from Wong’s new schemes to encourage more users to adopt clean heavy vehicles. In Budget 2025, the prime minister announced that the government will introduce a new Heavy Vehicle Zero Emissions Scheme and an Electric Heavy Vehicle Charger Grant. “These schemes will provide incentives for the purchase of a heavy vehicle, and co-funding of the charging infrastructure,” he says.
While analysts have spoken on Sembcorp as an energy play, the company also has EV charging hubs. Sembcorp launched its EV charging hub for trucks in Tuas in July 2021. According to media reports, the hub was slated to be open to public industrial vehicle use by 2022.
Additional Flat Component
Amid the positives CDG is tipped to enjoy, analysts like CGS International’s Lim Siew Khee believe the transport operator will see a “very slight” negative impact from the implementation of the additional flat component (AFC).
On Feb 14, Wong introduced the AFC to be implemented for electric heavy goods vehicles and buses. The AFC will be set at $250 per year for electric heavy goods vehicles, and $190 and $550 per year for electric minibuses and large buses respectively. The move will take place over three years starting from January 2026 and will be implemented in full by January 2028.
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“Only 2% of ComfortDelGro's Singapore bus fleet is electric by our estimates, which translates to negligible incremental operating expenses (opex) for the group,” Lim notes.
Introduction of schemes will help ‘ease cost barriers’
Companies like LHN Energy, an EV solutions provider in Singapore and a subsidiary of SGX-listed LHN Limited, welcomed the moves by the government to driving the decarbonisation of the transport sector.
“We recognise that transitioning to clean energy for heavy transport is a crucial step in achieving the nation's net-zero goals. The introduction of the Heavy Vehicle Zero Emissions Scheme and the Electric Heavy Vehicle Charger Grant will help ease the cost barriers for businesses looking to make the switch,” says Jeremy Ong, general manager of LHN Energy. “These initiatives signal the government’s recognition of the challenges that fleet operators face and provide practical solutions to support their transition.”
On the AFC, Ong notes that the economic advantages of doing so will “outweigh” initial costs.
“The Budget’s measures demonstrate that sustainability efforts must be both pragmatic and forward-looking, reinforcing Singapore’s position as a leader in green transport innovation. LHN Energy remains committed to supporting businesses in this journey and will continue to innovate and expand our suite of EV solutions to drive a cleaner, more energy-efficient future,” he adds.
