ComfortDelGro - CGS-CIMB Research 2022-08-12: Wheels In Motion

ComfortDelGro - Wheels In Motion

  • ComfortDelGro (SGX:C52) posted 2Q22 PATMI of S$42m (+21% y-o-y), benefiting from economic reopening of its key operating markets. We deem the set of results slightly below our expectations (but in-line with street), as 1H22 core PATMI made up 42%/46% of our/Bloomberg consensus FY22F.
  • Excluding government grants and exceptional items, 2Q22 core EBIT came in at S$62m (-4% q-o-q, +163% y-o-y). While operations generally saw sequential improvements, ComfortDelGro (SGX:C52) was impacted by FX headwinds (from S$ strength) and COVID-19 outbreaks in China (higher taxi rebates).
  • The public transport segment saw the strongest improvement, with 1H22 core EBIT (excluding government grants) recovering to S$77m (+124% y-o-y), led by stronger rail ridership in Singapore and improved charter volumes in UK and Australia. ComfortDelGro notes that the impact of increased energy prices on fuel and electricity was successfully offset by fuel indexation clauses.
  • In Singapore, ComfortDelGro’s rail ridership returned to ~80% of pre-COVID-19 levels in Jul as the workforce progressively returns to the office and nightlife resumes. We expect further recovery to reach 85% of pre-COVID-19 levels by year-end, as we expect hybrid work arrangements to be part of the “new normal”.
  • ComfortDelGro observed that its taxi drivers in SG are currently enjoying higher bookings vs pre-COVID levels. We think this could pave the way for ComfortDelGro to tweak its taxi business monetisation structure for higher commission fees.
  • We expect further earnings recovery with ComfortDelGro (SGX:C52)’s key geographies returning to a “new normal”. Our FY22-24F EPS are fine-tuned by 0.2%-4.9% as we factor in stronger S$ assumptions. Reiterate Add with slightly lower target price of S$1.75.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

ONG Khang Chuen CFA CGS-CIMB Research | 2022-08-12
SGX Stock Analyst Report ADD MAINTAIN ADD 1.75 DOWN 1.800

Read also CGS-CIMB's most recent report:
2022-11-14 ComfortDelGro 3Q22 - Inflationary Pain Offsets Ridership Recovery

Target prices by 4 other brokers at ComfortDelGro Target Prices.
Listing of broker reports at ComfortDelGro Analyst Report.

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