ComfortDelGro - UOB Kay Hian 2023-04-14: Taxi Segment Leading Overall Recovery Despite Industry Headwinds

• We recommend investors to take profit on any run-up in ComfortDelGro's share price close to our target price of S$1.29.
• For the public transport segment, ComfortDelGro’s rail ridership has recovered to near pre-pandemic levels and is expected to benefit from higher fares in 1Q23, dragged by the near-to medium-term earnings risks of losing its two bus packages.
• - Read this at SGinvestors.io -

Almost immune to COVID-19.

• - Read this at SGinvestors.io -
• For Mar 23, despite dipping 1.3% m-o-m, ComfortDelGro’s rail ridership improved 36.4% y-o-y, no surprise given that domestic COVID-19 measures have been fully eased. We also reckon that more commuters have shifted to trains due to elevated taxi and ride-hailing surcharges.
• With the 2.9% fare hike adjustment starting from 26 Dec 22, this would help mitigate falling margins that the public transport segment is facing due to higher overall inflationary cost push.
• Moving forward, we expect ComfortDelGro’s rail ridership to soften slightly in Apr 23 and May 23, due to rising domestic COVID-19 cases that may encourage commuters to work from home.

Impending announcement on Bukit Merah and Jurong West bus packages

• Read more at SGinvestors.io.

Llelleythan Tan UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-04-14 SGinvestors.io

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