ComfortDelGro - Could Taxis Stage A Reversal?
- ComfortDelGro (SGX:C52)’s key markets (the UK, Singapore, and Australia) are moving towards living with COVID-19, underpinned by vaccines and COVID-19 therapeutics. Indeed, mobility trends in Singapore have already begun to normalise amidst the ongoing reopening. As such, we are forecasting ComfortDelGro’s FY22F net profit to rise ~26% y-o-y as CDG’s key segments see increased ridership and demand.
- With Grab listed via a SPAC in the US and GoTo’s IPO happening next week, ComfortDelGro’s ride-hailing competitors may be subject to increased scrutiny, which could reduce aggressive competition and improve the economics of renting taxis. In turn, ComfortDelGro’s rental taxi fleet could reverse its declining trend.
- ComfortDelGro has embarked on multiple initiatives to turn its business segments green. The group has invested in green projects that include the provision of EV charging infrastructure and a greening of its bus and taxi fleet, which could potentially pave the way for inclusion in ESG indices.
- Reiterate BUY rating on ComfortDelGro with an SOTP-based target price of S$1.95. Our target price is based on our target prices for SBS Transit (SGX:S61) and VICOM (SGX:WJP), and a 6.5x FY22F EV/EBITDA for ComfortDelGro’s remaining businesses (including ComfortDelGro Australia).
Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.
Woon Bing YONG DBS Group Research | Paul YONG CFA DBS Research | https://www.dbs.com/insightsdirect/ 2022-04-11 2022-04-11
Previous report by DBS Research:
2022-03-03 ComfortDelGro - Emerging Sustainability Play
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