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

• 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.
• - Read this at SGinvestors.io -

Key positives to look forward to.

• We see the following factors driving ComfortDelGro (SGX:C52)'s q-o-q earnings improvement:
  1. - Read this at SGinvestors.io -
  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.

• Read more at SGinvestors.io.

Shekhar Jaiswal RHB Securities Research | https://www.rhbgroup.com/ 2023-05-19 SGinvestors.io

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