Ridership remains resilient. Mar09 average daily rail ridership rose 7.8% YoY to 0.36m while bus ridership declined 1.4% YoY to 2.2m. YTD, rail rid- ership increased 8.2% YoY, inline with our estimate (+8.0% YoY for FY09E). However, bus ridership declined 0.6% YoY, below our estimate (+4.0% YoYfor FY09E).

Impact of lower ridership could be offset by lower oil price. We estimate every 1% change in rail and bus ridership could affect earnings by 0.4% and 2.0%, respectively. YTD, average WTI oil price is down 47.3% YoY to US $48.3/bbl, 8% below our assumption. Lower oil prices could negate the lower ridership and provide further upside to our earnings. Our sensitivity analysis reveals that every 1% decline in oil could lead to a 0.6% increase in CD's earnings.

Maintain our earnings and Buy recommendation. We forecast 37% EPS growth in FY09E due to resilient ridership and moderating costs on lower oil prices. Our TP of S$1.75 implies 15.2x FY09E PE. Our DCF-derived TP for CD is based on a COE of 8.0% (3.1% RFR, 4.0% ERP, 1.2 beta) and a TGR rate of 1.0% (in line with the population growth in S'pore). Downside risks include: 1) a hike in oil prices, 2) regulatory/forex risks, and 3) a drop in ridership.