ComfortDelGro - RHB Invest 2023-05-19: Expecting Some Improvement In 2H23; Keep BUY

ComfortDelGro - Expecting Some Improvement In 2H23; Keep BUY

ComfortDelGro (SGX:C52) | SGinvestors.ioComfortDelGro (SGX:C52)
  • We lower 2023F-2025F earnings forecast for ComfortDelGro by 10–12%. We expect ComfortDelGro's earnings to gradually improve in 2H23 amidst reductions in taxi rental rebates and benefits from the annual indexation of overseas bus contracts.
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Key positives to look forward to.

  • We see the following factors driving ComfortDelGro (SGX:C52)'s q-o-q earnings improvement:
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    2. Singapore should continue to see improvement in ridership for rail,
    3. reduction in Singapore taxi rental discount from 15% to 10% starting 1 Apr 2023, and the scope to increase commission rates for taxi bookings (ComfortDelGro charges 5% vs 20% for Grab & Gojek), and
    4. eventual reduction of incentives offered to taxi drivers in China during 1Q23.

Strong balance sheet, reasonable dividend yield, and compelling valuation.

  •

Shekhar Jaiswal RHB Securities Research | 2023-05-19

Read also RHB's most recent report:
2024-05-15 ComfortDelGro - Seasonally Weak 1Q24; Better 2H24 Expected; BUY.

Previous report by RHB:
2024-04-05 ComfortDelGro - UK Bus Contract To Boost Earnings From 2025; BUY.

Price targets by 5 other brokers at ComfortDelGro Target Prices.

Listing of research reports at ComfortDelGro Analyst Reports.

Relevant links:
ComfortDelGro Share Price History,
ComfortDelGro Announcements,
ComfortDelGro Dividends & Corporate Actions,
ComfortDelGro News Articles


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